As dismayed as I am with my last Apple Care instance I suspect that the issue is that Apple doesn't know how to fix it and not that they won't. The 8800 GT is tempting, but it's not the solution, unless they wnat to knock $200 off the price.
It's the only fix right now, and probably for the next few months. Soon as that 14 days over you're screwed with refurbished junk. It's sad, I know, I didn't want/need the 8800GT I wanted the 2600XT at first, in the end Im glad I got the 8800GT.