Exploding Macbook Pro Battery = "Expected Behaviour"

After booking my appointment with a Genius at the Genius Bar in Sydney's city Apple Store, waiting in line dutifully holding my AppleCare extended warranty stuff, packing what I thought would be an iron-clad case of Exploding Battery Obviously Defective Here's A New One Sir, I was rudely awoken by the facts.

Apple's official position, according to the lips of two courteous Genii, is that exploding is "expected behaviour".  The battery was bought with the computer in June 2008 (exactly 2 years ago) and it had been sitting for a couple of months looking like this before I got around to taking it in:
 

Well it's not behaviour I ever expected. And I say this with some experience with batteries, even lithium ion rechargeable batteries, that ranges roughly two fashionable Genius lifespans or near enough, judging by their fresh-faced appearance. I've never had anything like this.

I think the elephant in the room is that while the fine print may say that the extended warranty doesn't cover batteries, this is a major manufacturing defect and Apple know it. I was virtually told as much as I was assured my 1 year old Macbook Pro with the built-in battery would not suffer the same fate since it is a non-nickel based lithium polymer construction. I was invited to attend the Apple battery page: http://www.apple.com/batteries/ which keen observers will note contains nothing of Apple's expectation of explosions.

Looking further the Apple battery replacement page says:

However the AppleCare Protection Plan for notebook computers does not cover batteries that have failed or are exhibiting diminished capacity except when the failure or diminished capacity is the result of a manufacturing defect.

Right so, who says this is not a manufacturing defect? Shouldn't a manufacturer's expectations about common failure cases be published on thier main information page? If it really is not a manufacturing defect where is the information about this expected behaviour on their written material?

The battery still holds a charge as demonstrated by the indicator lights on the battery. Also, although it doesn't properly fit the case due to it's unsightly bulge, it was powering the laptop fine until I took it out. In fact the reason I did so was because the bulge was pushing the back of the mouse button, preventing it from clicking. None of this stuff appeared to be news to the Geniuses. Just another exploding battery.

So $199 later, I purchase a new battery which, I carefully confirmed, would be expected to explode in roughly 300 power cycles (which I assured the young Genius my existing battery had not experienced).

Has anyone else had luck in getting their battery replaced as a part of Apple extended warranty? I see plenty of talk to this end:

http://www.appledefects.com/?cat=27
http://discussions.apple.com/thread.jspa?threadID=909217
http://www.tuaw.com/2006/12/25/battle-of-the-battery-bulge/