3 points:
1. The employees at both of my local Apple stores make about $8/hr, in an area where MacDonalds pays $14/hr. Why exactly this is, is entirely evident within about thirty seconds of conversation with any of them. Utterly useless. They might as well be selling coffee for the starbuck.
2. Grey area: After nearly a year and no freaking ToDo list, syncable notes, or other basic functionality, Apples "You attempt to actually get some use out of your phone, and you and your offspring will be smote for a thousand years" attitude is a little rich.
3. If I pay six hundred freaking dollars for a little telephone, I bought and own the thing, I'm not leasing it from the manufacturer, unless I am, and I'm not. As in, it's mine to modify and use as I see fit ...which goes hand in hand with: if I muck it up while using it as a tire iron or some other purpose which it wasn't intended for, I should not expect Apple to cover the damage. At that point, I have a messed up pile of parts, some of which might do some clever inventor some good on the ebay. If that battery were defective, then it'd be understandable to have Apple cover its replacement, regardless of whether you unlocked or jailbroke your phone. If I buy an iPhone and simply use it as an iPod, I'd expect them to stand behind their hardware, regarless of whether they were making the kickback on service I wasn't interested in buying.
However, you dropped the unit and damaged it. If the only thing that keeps you honest is the fact that you also unlocked it, & now you're stuck with it, well, it's hard to have sympathy for you.