Am I endanger of catastrophic failure????

[jparman]

If you have to ask that question the answer is probably yes I suppose.

Bear with me as I try to describe this - those folks that are familiar with bicycles are going to have an easier time understanding what I am trying to communicate.

I bought a VStrom today (from a dealership) and am concerned about the condition of the bike. As the fork steerer passes through the headtube of the frame, there is a bearing cap that loads the bearings against the race in the head tube. This bearing cap appears to be nearing failure - it has stress fractures all over it, at least twenty - it is far deeper than the finish as it is neither painted, powder coated or ano.
I am guessing that the bike was either in a frontal or someone messed with the fork and overloaded the bearing cap causing it to fail.
How concerned about this should I be - is the bike ridable.
If I go back to the dealer what should I expect. Should they fix it? Can I null the contract?
The dealer claimed that they did an inspection...

I'll try to post pics, have to find my 50mm.