I agree with Level42, however I wouldn't replace it. That just isn't feasible IMO. But for the vendor not to at least give you "store credit" on your next purchase it just plain bad business, again - IMO. If it's obviously a vendor related defect, which it is, then he shouldn't hide behind a 7 day return policy unless he's inferring that's how long his product can be trusted or that you are lying. Either way would leave a bad taste in my mouth.
Sorry, I'll stop the rant now because this is starting to piss me off the more I think about.
Nice job as always Spy!!!