Jeff, I have no reason to try and deceive you guys and have done my best to answer questions based on what has happened and what has been communicated to me from the dealership. If I was trying to deceive you guys I wouldn't waste so much time posting, mine or yours.
Edit:
They never said anything about contacting the warranty office first. They were going to investigate the issue, and then go from there. They ran it and the Viper Tech said "there are two knocking sounds, and one is what you would hear from water damage". From there, I had to authorize the dropping of the oil pan at $98 an hour for diagnostics. Once they dropped the pan and saw that much water they called it a day and said they wouldn't be able to justify a warranty repair because of the amount of water.
I'm not as knowledgeable as I should be, but that caught me off guard and I wasn't sure what to reply with. They were holding firm at not looking any further and that it will be an insurance claim.
Thanks for the info though, and from the start things didn't seem right to me. I'll see about trying to pull the covers if they'll give me access.