One other thing popped into my head while browsing the selection of
hardwoods at the yard - some of the pieces were separating or fraying in
sections. I don't know the technical term for it, but I would imagine it is
caused by uneven drying and having two halves of the wood crook in different
directions. Basically the edges of the wood are fine, its the middle that
has split apart.

So let's say you have 1 foot of that on an 8 foot board - would you attempt
to talk them out of making you pay for that 1 foot of useless wood
Here's a pic of what I mean - http://images.lowes.com/general/s/split.jpg