Wow .... Yeah that is. Really bad. If it were me I would get ready to go full bore on the Internet. With full details and excellent documentation. Do it thru email not on the phone, that will keep it all well documented responses. Including purchase receipt and all other details, so you maintain your credibility. That's an exterior leak, right? So nothing they can say about your part, unless there were install, handling damage. So a pic of the cover sheet metal too. After you have hit every website with a nice thread , see what they say. If they leave you hanging then let out all the info and details.
No way I would ship it back unless they have one there ready to put back in on the spot. A local welder would be far cheaper and they know it. Please find out how thick the outer jacket is, a good welder will be able to tell you how good the metal is too. This is getting rediculous on these manufacturers problems and their CYA warranties, and I'm only referring to the ones that are fully documented and shown to be manufacturer fault. Cause there are plenty of owner caused problems as well. There is big money in this industry, yet no one here in the states has taken a great proven design and copied it. Look at several of the indoor models that last way longer and some like Tarm for 30+++ years! then sell for a couple grand used still. Those cast iron exchangers are pretty tuff, but all we have are lousy steel box in box construction with cheap metal. Pretty sad that you spend 10-20 thousand on a system, to save a bunch of money if it last 10-12 years then have to buy another. No wonder there are so many for sale, or people getting away from it. The long term happy wood boiler owner is getting more and more rare.