When it wore through the cover, where did the shavings go?
You might want to pull the pan to make sure it's clean, along with the oil pump.
Hughes should take that back and you shouldn't have to deal with the manufacturer, you bought it from hughes, they are your retail point. That's BS on their part.
Does summit make you send it back to the manufacturer??? We never did when I was running a shop in the 80's. We took care of the issue at the store level and dealt with the manufacture as a service to the customer and avoiding court like the plague.
