I think you are making the right decision except for the postal part. I would suggest before going to the dealer to go by a paint shop that paint bikes and get an estimate on the repair. I know how you felt when you went in to the shop and looked at the damage. You were in shock, and if like me trying to stay calm as not to cause damage to 3-4 HD employee's. Handle it professionally. They have insurance for this kind of stuff. They may be trying to hide the issue from the GM, as a matter of fact when you go in don't even talk to the service dept., go straight to the GM and tell him what happened and what they offered to smooth things over. There is probably more going on here than meets the eye. For instance, this is just hypothetical, but it may be the tech on your bike has had other probs and one more and he is gone, or he and the service manager are buddies and he is protecting him. In any case though just stay calm and don't settle for any thing less than whats fair and just. You came in with no probs, you should leave without any probs.