Fast forward to today:
They said they got my Madone frame this morning, the seatstay damage is purely cosmetic. The derailleur dropout has to be replaced. They're ruling it a non-warranty case and they are charging me $60 + shipping back to fix it. Jax plans to charge me $50 for the stripping of the bike to the frame and boxing it up and $40 to ship it to Trek. So that puts me at $150ish so far, I still have to replace the rear derailleur and chain and pay to have it re-assembled.
I talked to Rock n' Road cyclery and they said to have Trek fix the frame and send it back to Jax. They told me to pay Jax what I owe them so far but not have them put the Madone together and charge me extra for that. They said when the frame returns to Jax to pick up all the parts in a box and bring it to their shop. They're going to try to replace the rear derailleur under warranty through Shimano and they will give me a free chain. They said if Shimano won't warranty the rear derailleur, they will sell one to me at their store cost. They're also going to have their mechanic assemble the bike for me at no extra cost... now THAT's what I call customer service.
As soon as the Madone comes back together I will be putting it up for sale and with the proceeds I will be purchasing a Specialized Tarmac Expert Compact from Rock n Road.
I have lost my faith in Trek... the bike dealer (who shall remain nameless) failed to own up to his mistake and the manufacturer let me down by fronting me full cost to replace all the damaged parts.