Sorry to hear your problems, I know how frustrating these things can be.
Iím not surprised you didn't get any joy from the finance company. Miss or stop making payment and there be all over like a rash, then they will consider the bike there problem and Iím sure they wonít be satisfied with a lemon either and be insisting for a refund from cycleworks.
The bikes under warranty, canít you phone KTM, pick the bike up and take it to another dealer? Once itís fixed you can then trade it in for a 2010 if you wish. Whatever you do donít stop the payments with the finance company no matter how angry you feel.