Support for iPhone servicing/replacement overseas?

Hi,

I'm at an odd case here, and talkign to the AppleCare CSRs in both North America and here in Germany (ended up talking to someone in Hungary and someone in India on the phone...) they weren't all that sure how to help me.

Purchased my iPhone4 with AT&T about 8.5mth ago (so still under Apple Limited Warrenty) but my phone is officially dead:

https://discussions.apple.com/thread/2479664?answerId=15277621022#15277621022

No response to hard boot, recovery mode, DFU mode, plugging into iTunes or plugging into AC power.

AppleCare suggested a replacement, but two problems:

First: They were unsure that if I was able to bring it into an AppleStore in Germany (none of which are remotely close to me...) if the would replace it and

Second: If they did replace it, I was told it would then 'be locked to German providers'

Question 1: Has anyone had luck getting their iPhones serviced away from their purchasing country?

Question 2: I'm confused about the 'locked to German providers' comment... iPhones sold in AppleStores in Germany are sold unlocked... Would they lock mine to a provider on purpose? Or is the unlocking not handled by the AppleStore... I'm not too familiar with the process because it's impossible in the US. Honestly I dont care about unlocked or not right now... I just want to be able to use it!

Any advice would be great! Thanks