15 mth applecare left, what for ?

my Ipod 4th g clickwheel (no color) 20Gig did not fall. I found the screen broken (not the outside glass which has no visible impact , but the LCD screen with an extensive black spot on the left lower corner).
I bought it last december along with an applecare coverage.
I call applecare, they sent me an ups box and the Ipod went for a trip to the centralized European repair center last week.
I received it back today without repair, with a polite letter saying that it is not covered neither by the warranty nor the applecare, and that they won't even repair it "because of the prohibited cost of the repair".
Of course, because I found the screen broken when I took it from my bag (inside its leather protection skin), I cannot be 100% sure there was no injury to the Ipod outside of my view.
Now I have an "unusable" 4g Ipod (it still works as an external hard drive, and the music player is still good, but "random") , with a 15 month applecare coverage left...
What would you do yourself in this situation ?

asked for the money back :
Ok they said, this will cost 25 Euros for opening the file, and the money back will calculated in deduction of the time since the date of purchase of the applecare : means, 10 months out 24. So from 65 Euros = 38 Euros - 25 Euros : 13 Euros (ridiculous)
No way to transfer the apple care to a new purchased ipod..
Remember, if you buy an applecare just before the one year warranty, you will pay full price (65 Euros). This may drive us to never buy an ipod apple care before the end of the warranty, or buy the applecare the day of the problem appears, except if this is a screen problem..

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15 mth applecare left, what for ?

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