Update
Got sled back from the new dealer I took it to. They rebuilt the top end completely under warranty. Apparently Polaris never even questioned it and just told them its under warranty and to fix it.
I really cant say anything bad about Poalris as far as the warranty goes as they have done great both times.
Just trying to support local did not work out so well for me, but I guess live and learn. The New dealership was great and I put 100 miles breaking the sled in and its working great so far with no issues (knock on wood...).
Anyway I still dont know what was up with the original dealer but definatley something fishy, but I am back riding now and the sleds running great so back to sledding this season!
Thanks for the comments on here, help is always appreciated.