Update:
K2 warrantied both frames (had no doubts on this). We got the new version of frames with the integrated HS. :cool:
Sad part:
When they were pulling apart my frame (sz: small) they claimed that the bottom bracket was damaged and so was the threading in the bottom bracket. Now i have no clue as to how this happened, i havent had to service anything on the bike since i bought it over a year ago... In any case after the local REI rebuilt up the bikes i called to check the status on them they tell me they are still waiting on the BB to be warrantied by K2, (3 weeks so far without the bikes). The local REI guy keeps giving me the run around saying they havent heard from K2 and that they are waiting on K2. One guy went as far as saying K2 dropped the ball and not them :dunno:...
So in any case today i do some digging and find the BBB up in Washington and local K2's Quality Assurance Managers phone number. I give this guy a ring and explained what was happening and that their dealer was telling me that the delay was at K2 and not them. He looks up the RMA's for the frames and see's no mention of a bad bottom bracket. Thankfully he is calling the local REI store right now to straighten all this crap out. I've about had it and may purchase my own damn BB so i can have my bike back :/...
Just thought i would share.