Apple may charge $100+ just to look at iPod Nano (1st gen)?

I got the iPod Nano 1st gen replacement program email. My nano hasn't been working for quite some time, even when I plug it in to my computer so I figured this would be a great deal. I typed in the serial # online and Apple emailed me saying "Our initial diagnosis indicates that because your product replacement will likely be covered by the warranty, an AppleCare Protection Plan, or another Apple repair or exchange program, there should be no charge to you for the service performed. If we have questions or concerns regarding the repair coverage, we will notify you"
After reading further into the email, it says that Apple might charge a diagnostic fee of $100 if the problem isn't battery related (*** kind of rip off is that?!). I'm pretty sure the battery is gone, but I don't know if I am willing to gamble $100 on it. I payed $200 for it in spring/summer 06 so it fits the Replacement Program criteria. Do they just expect people to be cool with the fact that they could be charged a bill for it? I know thewarranty is long gone but ****...makes me more skeptical about buying anything from Apple again. Should I send it in or just throw it away?

see my thread about this..
called the 800# about the same issue you have.
see below:
***UPDATE****
Spoke to APPLE SUPPORT
They said that they are asking for these nanos as part of a replacement program.
They assured me that the fee does NOT apply
Replacements may be refurbished models
Look for APPLE to provide updated customer communication
thanks

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