I noticed that the gun was recoiling bad, much worse that I have ever seen a 40 do, but having never owned a Cougar ...
Yea, that doesn't sound right at all. The Cougar is supposed to shoot the 40 pretty nice, I've heard the rotating barrel really shines with that cartridge. Haven't had a chance to try it first hand though as my Cougar is in the 9mm (the .40sw Cougar is on my short list with 2 other guns, not sure which I'll get first ).
btw - looked at mine last night and just a little spot on my tab where the finish had rubbed off, no visible wear to the steel. Good thing you sent yours in and I'm glad they are taking care of it. That's good to hear as I really like these guns and want to get another one.