Well, my saga has hopefully come to an end. I'll recap the entire story for those who haven't been following along.
I bought my '99 C2 Cabriolet in May '06 with 40K miles. 100% stock. Porsche PPI was great...all dealer maintenance per schedule. Out of curiosity, I inquired about aftermarket warranties. Given the condition and maintenance history of the vehicle I decided to pass.
18 months of worry-free driving and no issues whatsoever. Carchex continued to try to sell me a warranty this whole time. In February 2008 I started getting worried about these stories of intermediate shaft failures, cracked blocks, slipped sleeves, etc so I responded to one of Carchex's emails. They offered me a full OEM warranty which covers everythign excluding normal maintanance for $3500. The warranty was good for 4 years or until 75K miles (I had 48K on it). I decided to buy it.
I drive the car for a few more months, and take it in to the Porsche dealer in mid-May for the yearly service. They find some oil in the coolant and suggest it could be a blown head gasket. They call the warranty company directly and they indicate that I must authorize $500 of teardown costs to diagnose the problem. They tear it down, head gasket fine, oil cooler fine, so the next think to look at is the block which requires another $1500 or so of UV testing etc. The claims adjuster (Don)comes out, looks at it, and says if I pay for the teardown and they find a fault it they will pay for the teardown and the replacement parts. The dealership gets the results back about a week later...cracked cylinder. Total engine replacement needed. They call the warranty company back. They are reassigned to Robert because Don was terminated the previous day. Robert is not helpful and says it's not covered. I call him directly to discuss it and he tells me we need to prove what caused the crack before they will cover it. I tell him Don's position and he tells me that's why Don was fired, because he wasn't 'properly' approving claims (I interpreted this to mean he was approving too many period...even if they were legit). I go back and forth with Robert, telling him cracks in blocks can happen from a number of things and it is impossible to determine the actual cause. I pull out my email from when they sold me the warranty that basically says "everything except normal maintenance" and I threaten to involve my attorney and he changes his tune a bit. Finally I got him to agree to approve it, but he used a Chelton manual that had 8 fewer hours for the remove and replace labor, so they wouldn't cover about $800-1000 of it. I fought that at first, but ultimately gave in and got tire of fighting over $800 for a total engine replacement. This was 2 weeks ago.
The dealer orders a remanufactured engine from Porsche. I tell them while they have the engine out to replace the clutch and any other work that would be part of the 60K inspection. They had to order a few random hoses and clamps, and finally today I get the call that its ready.
So today, I basically have a 'new' 1999 C2 Cabriolet. New engine (with 2 yr, 24K mile warranty from Porsche), new clutch, new belts, hoses, filters, etc). Total out of pocket is $3,300 on top of the $3,500 warranty (which covers everything else through 75K miles). Total bill from the dealer was $14.5K.
500 miles of break-in time and then the fun begins.
I had been thinking of selling the car as my kids are getting older and a sport sedan was more practical, but now that I effectively have a 'new' Porsche I don't think I can drive myself to do it.
I would have regretted it anyway, so this is just what I needed!