Hey razorburn, sorry about your issue.
Not sure if your complaint here is the lock, the service, or both, but I'll try to address them for you.
As to the lock travel, there has been a thread about this in the past, you can read it here:
http://www.bladeforums.com/forums/showthread.php?t=533463&highlight=leek
Whether or not this satisfies you I am unsure, but I don't have more to add on the issue. Personally I don't particularly like the lock travel, and Craig and I (as well as STeven & I) have had some serious (some of it very heated) over the particulars of the subject.
With regards to your Ti Mini Cyclone (see post #18 in the link), it has a flat 7 degree plane in the lock area, thus the lock will travel over (on most anyway). What we have found is that is doesn't affect the lock up, and there is no "slop" that occurs because of this travel. This may be annoying to some and doesn't get a second look from others, but there is not a "fix" for Ti Mini Cyclone for those it bothers. It is not considered a defect or a warranty issue, but we do try and satify those that is does annoy by fine tuning the knife up the best we can.
I do know you have had additional issues with this knife after you took it apart and reassembled it. I can tell by your description of how the knife is currently behaving that it has to do with how you have put the knife back together.
As far as the knife coming back from warranty in the shape that it did, all I can say is that that is not the norm, and if it is as you say, we apologize. I have spoken with Craig on the particulars of your situation, and if you would like to get the piece to us again we will tune it up. If you need us to send a call tag to do that, we will honor that as well.
I will say that I don't think the piece is going to come back to you without the lock travel, as that is not how the knife was constructed, sorry.