Similar story, on a much smaller scale - bought a set of Craftsman
quick-change drill bits, and the 1/8" bit twisted right out of its base
while I was drilling shallow holes in soft pine, one of the first times
I used the bit. Craftsman has the best warranty around, right? So I
took it back to the store, and they said drill bits weren't covered, or
else people would bring them back every time they get dull, etc. To
make a long story slightly shorter, it took several letters and phone
calls to Craftsman headquarters, them calling the local store, and then
the local store manager reluctantly gave me a new bit. I know, too
much hassle for a $2 drill bit, but I was hoping to find out how much
they care about their customers and backing up their warranty, etc. I
did indeed find that out, and even though they eventually replaced the
bit, I now shop catalogs or even the borg before I go back to Sears.
Never had any hassles in my limited experiences with HD tool/drill bit
warranties.
(No affiliations with any of these companies, etc...)