We had a similar situation, whereby a 4.0L V6 seized in an Explorer due to oil starvation. I'm not sure about the exact particulars, but Ford gave a green light to rebuild the engine, whilst the customer wanted a brand new vehicle to replace his.
The problem was that once the truck left the dealership, all the servicing was done by an independent quick lube using Castrol GTX 20W-50. Ford calls for 10W-30 in this part of the world. The dealership did not void the warranty, but all the services he missed will have to be performed to keep the warranty. So he was told the engine would be rebuilt, on the condition that he agrees to have all the services he missed done. Basically includes stuff like ATF and PSF replacement, fuel filter, etc.
He isn't happy, and is apparently filing a complaint with the government-run Consumer Protection Agency, as well as writing about "our incompetence" to the editors of all newspapers.