It turns out that the dealer was within the law by handling damage in this way. Most states appear to have a similar statute that allows damage up to 5% of the value of the car to be repaired before a damage disclosure to the buyer is required. (ooo, I rhyme!)
Source... 3-7.2
That said, I still think this place is full of weasels. I'm not going back short of major mechanical damage, as from what I've seen they'll do their best to deny whatever I need done.
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