As a follow up 12 days later, after physically carrying in my 27" iMac 13 months post purchase to Apple store in White Plains (after getting the impression when I drove there the day before that they might be flexible) and finding out yes it was the LCD and no they wouldn't give me a break—I would have to pay $535 to fix it.
I carried it out, dissapointed in the lack of brand loyalty (been buying multiple machines for 22 years for biz and pleasure) and took it to a local authorized repair shop. The story goes on with a NEW problem with my backup Mac once the big one was getting fixed (Mountain Lion OS caused issues with the Adobe software and the whole thing resulted in 9 hours of my time backing up, reintializing and reinstalling).
Bottom line, one empathetic customer relations person that tech support connected me to cared about a loyal customer over 2 decades being so unhappy and disillusioned and called the repair shop and picked up the tab for a replacement LCD.
Moral of the story, I spoke to 4 people at Apple before this fellow that made me angry and resentful about being an "Apple advocate" but this guy's attention and follow up undid their damage and made me pro Apple again.