Well I figured I'd give you guys an update. I got it back a couple weeks ago and had a chance to use it before the season completely ended. Instead of giving me a new blower they went a head and fixed the blower.
At first they thought the fuel settings weren't set right and that the engine was running lean. They also asked if i ran straight gas in it and ask how many times i filled up, i filled it 6 times since I bought it. The engine seemed to run fine so I was a bit taken back by that thought.
They continued to take it a part and found that the piston did a lot of damage to the block, it pretty much self destructed. They went ahead and ripped out the block and replaced it with a new one. I guess it was just an air leak into the engine that killed it. It was under warranty so i didn't have to pay the $300.00 repair bill.
Side Story: When I brought it in I told the guys at the front desk what was wrong with it. A tech comes out and says "this is broke? there's not a scratch on it". Another guy says "yeah, it only has 7 hours on it!" hahahahahahaha
Glad you got it fixed under warranty, $300 going into the off season hurts!