Droid2 and "foam" creeping up under screen

[A1cntrler]

I have had a Droid2 for a little over a year now (Upgraded from a couple of D1's) and about 2 months ago I noticed my screen looked distorted across the bottom near the Settings, Home, Back and Search bar.  Since that time this foam has continued to creep up into the viewing area and now covers the icon I keep at the bottom of my screen. 

I took it into a Verizon store (Actual store, not authorized retailer) and the nice lady took my phone and right away said it was scratched and not unwarrantable (It has some rub marks on it form a case I used to carry it in, but since I use the car dock and the dock at home, I stopped using the case)  She said she could see that the case had been rubbing, but it also gives the appearance it has been dropped.  (Keep in mind this diagnosis was before she even asked me what the problem was).  She then asked for my info, and looked me up in the system and offered to let me upgrade early for $20 plus the price of a new phone plus taxes and fees. 

I then asked her what the rub marks had to do with my problem of the foam creeping up under the screen, and she told me that they do not do the warranty inspections anymore and cannot make the call, but once the ship it to the warranty center upon visual inspection it will likely be rejected.  What would happen is that they will mail me a replacement to activate, I send them my old phone, then when it reaches the inspection center they will either accept it and the replacement phone is mine, or reject it in which case they still keep it and simply bill the replacement phone to my account.  She then took the phone in the back to speak to the store manager and returned a few minutes later and told me he said the same thing.

To me it sounds like VZW has the upper hand in all of this, and is going to get a dime either way.  All one needs to do is open up the great Google and search Droid 2 and foam and see a listing of many people that have been having the same issue.  I also have the extended warranty through Asurion, but I would rather not have to use then to make them pay for what is a manufacture defect.  That just seems like the easy way out.

Anyone else with a Droid2 go through this process yet and if so, what were your results?

[A1cntrler]

So nobody has any advice for me on this, or has been through it?