So what everyone is saying is that if the indicator in my 8800 is tripped yet the phone has never been exposed to true water causing damage, RIM / provider can void my warranty?

I'll have to run that by my wife who is an attorney. She can make a few calls to product liability type friends.

IMO, if they denied my warranty, I'd ask them to prove the water caused the issue I'm bringing it in for. Similar to a car that's been in a flood, if it flooded the floor and interior, they can't deny warranty on the entire engine unless they can prove the water damaged the motor.

Sounds like a scam most wouldn't push due to attorney fees. However, I'd push it.