18 days out on my Sturgis trip the 110 in my CVO UC had a catastrophic tappet failure on the front cylinder intake. I had 29,000 miles on the bike when it failed. I left the bike at Destination HD in Tacoma, WA. Harley replaced the motor, oil cooler and pan and 11 days later I was back on the road. I couldn't have asked for better service from either the dealer or MOCO. The only sign of impending failure was a "picking" noise under load for about 800 miles prior to the failure. I attributed the noise to bad gas detonation and started using octane booster. With this experience I recognized that the 103 in my 2010 Limited in New Zealand was exhibiting the same "picking" noise. Harley replaced the tappets in my 2010 under warranty.
It seems to me that what you are having is a dealer problem. I shudder to think of the BS I would have gone through here in Canada had my motor failed north of the border. The dealer in Tacoma was so helpfull and on the ball that the stress of what could have been a bad situation evaporated. The service manager diagnosed the problem as soon as my bike arrived on a trailer in their shop. Same deal with the Harley dealer in Auckland. They are storing my Limited (for free) until I return in November. I called them, told them what had happened with my 110. They opened the motor up even though I could tell they were suspicious of my long distance diagnosis, confirmed the deteriorating tappet, got approval from Harley and replaced the tappets under warranty in about six working days.
It is sad to think that the dealer is so central in whether you have a good experience or bad experience, because I can't believe that MOCO has differing warranty policies from dealer to dealer. Contrasting that is a recent experience with a local dealer. I recently had a weld fail on an exhaust cover. After waiting two months for a warranty replacement, I decided that I would fix the weld so that the cover didn't fall off when I was on my Sturgis trip. I was told by the service manager at the local dealer that if I fixed the defective weld (out of my own pocket), the replacement wouldn't be covered under warranty. I can only imagine the bs responses I would have got over my destroyed 110. Sad, but true.