Damn. I don't have an alignment gauge but using the string around the headtube method, my rear triangle is indeed fubar. It's off 5mm (measured at the seat tube) and looking at the chainstays and dropouts shows more irregularities (i think the driveside is higher off the ground). The more I look at it, it looks like several things are messed up. The bike has never been crashed so...maybe the damn thing left the factory like this. Worth a try at a warranty claim I guess.
Guess I'll have to put back on the mtb crankset (wider q-factor means there is more crank-arm to chainstay clearance).
Wish I could edit the original thread title now. Oh well.