Hi guys,
Well, just got off the phone to Apple. The guy who took my call basically said what I expected - that it was out of warranty. I told him that this was a known issue and was affecting loads of people, that there were post on Apple's forums and one of the serial numbers was similar to mine.
He put me on hold for a few minutes, then came back to and send that there was a known issue and that they'd do a "one time exception" and replace the unit free of charge.
So that's the time capsule sorted out, but now I have to ask them to extract the disk, which Apple said they aren't supposed to do so they'll have to get permission from Apple to do it...
Still, it's better than the "get stuffed" I expected when I called :-)