anyone else guessing this was a cold sieze besides me? if that is the cause, Hopefully your dealer will try to get it covered, or at least cut you a deal. the Dealer should have warned on how to avoid this situation when the sled was delivered. (Just guessing here, so don't go slamming me)
The way he said it "Started retarding the timing" was probably the beginning of the sieze, (still only speculation on my part from the vague description of the circumstances)
we saw this alot in the 04-05 season because some people figured since the sled is computer controlled, it is pull and go WFO. and the sled will adjust itself for optimum running conditions. You got to let these things warm up, gently.
To prevent this from ever happening, or at least lessening the chance of a cold sieze, let these engines come up to temp. At least to 120 degrees on the temp gauge, then be light on the throttle for the first few miles till everything is warm. better yet, do this on a stand so the belt & track can rotate to loosen up and last longer.
The most probable time for a cold sieze is when you are taking a lunch break in real cold weather, the coolant in the heat exchangers gets real cold fast. Then when that super-cooled coolant hits those cylinder walls quickly from hard throttle application, it cools the cylinder and shrinks it to a size smaller than the still-warm piston. badda-Bing! Siezure!
Let us know what the diagnosis is, and please post pictures for us to see. I hope your dealer gets this unfortunate failure fixed fast and at no cost to you.
Thanx, G2O (Gettin2Old)