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I am sorry to hear about this, however you are best to speak with your local Xperia Care team regarding and warranty/service questions.
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When he calls back refuse the repair they are offering you and demand a replacement. Paying $160 for a repair which would be covered by the warranty (as long as its not been damaged by you) is unacceptable. Tell him why would you pay $160 for them to go through the same procedure that you would go through if you was claiming on the warranty? If you sent it back under warranty they would repair it if they can and replace it if they cant. Stick to your guns and dont back down. Good luck mate, let us know how the phone call goes.
Hi, what an appalling ridiculous situation :smileyrolleyes:...this does not send out good signals nor confidence in the aftermarket support and with the extended warranty it makes the whole situation 100% worse!!!!
Totally agree with the last piece of advice.....stand your ground, dont accept the offer of a repair...you paid good money for an extended warranty & basically they are saying its worthless....
If in the long run you DO have to end up sending it for repair i would advise you to do so but only in the understanding that you get your money back for the extended warranty.
Some people might say that this could cause problems if you need to have it repaired again in the future but who is to say that whatever repair you might need will be covered anyway :smileysmileywink:
Good luck but dig your heels in bud 
Did he ring back? If so, how did it go?
Just keep at them, i think eventually they will cave. They are clearly in the wrong, they are just hoping you will just roll over and accept what ever they say. Good luck and let us know how it goes.
So I spoke with both a Supervisor of Sony Canada's Extended Warranty Department and the District Manager of the Sony Store where we purchased our phone.
The Supervisor pretty much said what I expected.. There's nothing they can really do, I'd have to take it up with the store.
I at least made some ground speaking with the District Manager. He informed me there is both an ADH Warranty (accidental damage) and Extended Warranty (extends regular warranty by 2 years). He said if we wish to replace the device under the ADH, we can, but it will use up that warranty completely. We would get a brand new device, but only the extended warranty moving forward.
Our other option is to send it for repairs under the standard warranty (2 week wait), and we would keep both ADH and Extended Warranty moving forward. That way if the phone gets damaged beyond repair within the ADH / extended warranty time frame, we could use the ADH then to replace the device. He also added they would arrange for a loaner device, and expedite the shipping for the repairs.
Pretty much Sony only replaces the device once under the ADH warranty. I can understand that, because people could abuse it.
I'm going to fine read the details of the ADH before deciding what way to go. I'm at least happy that I got a straight answer and an option. It's still a shame that it took probably close to 8 hours total of phone calls speaking to God knows how many different Sony employees from at least 6 different departments before I received a straight up answer, and fair resolution.
Sony really needs to improve their communication both internally and externally. It should not have taken as much effort as it did to reach this resolution.
Exellent, at least you have the information now. Sony should have explained all this in store when you got the extended warrany, they need to get their act together. My advice would be to send it in for regular repair and keep the ADH warranty for a more serious issue at a later date. Glad you got it sorted 