Maybe. I'm kind of exhausted from the arguments over the last week. The dealership also does that scuzzy thing where they include the "aftermarket warranty that is free for the first 60 days, but you have to remember to cancel it before then, because it actually covers nothing". Well, weirdly, it actually covers this, and this repair would pay for the warranty in full... So I'm going to use them, and the warranty is surprisingly cool with "light offroading". I told them I plan to use it as an overland camping vehicle, and they agreed to add into the notes on my contract that "body modifications, up to a 2" lift, and up to 33" tires are approved modifications" under my contract. She said "we're really just concerned about changes to the powertrain. Just don't lift it 5", put on 37s, and chip it."
So I'm still angry at the dealership, but shocked at the customer service of the warranty company. Maybe I got lucky and talked to the right person at the warranty company. This has been a weird saga.