Well, it sounds like their customer service was lacking, no doubt. I had not experienced that with them, but have only dealt with them at once. However, that they didn't give you a discount on a new barrel isn't a surprise. The damage appears to be user-based. They suggested you left a patch in the barrel, but it looks like a squib ring. Not all squibs produce big bulges. So basically, Shilen is going to believe the problem was not of their creation and hence have no feeling of obligation to discount you a new barrel.
No shock there either that Shilen did not want to pay to send your barrel back. They don't see it as a warranty issue (assuming their warranty covers shipping and not all companies have warranties that cover shipping).
This, of course, does not make up for the poor communications in any way. They should have called you with their assessment within a day or two of receiving the barrel.
"If you look through your scope and see your shoe, aim higher." -- said to me by my 11 year old daughter before going out for hogs 8/13/2011
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