So basically, the PCNA rep explained that the somking is due to an indadequate lubrication system for hard cornering , and the type 2 overrev is their way of "not fixing it".
That seems to be quite a stretch. A type 2 overrev has no relation to hard cornering or smoking.
Porsche makes race cars and Porsche makes street cars. Why should a street car be assumed to be identical to a race car? They sure don't cost as much (and they are considerably more affordable than Ferraris).
From reading forums comparing AX events in different regions, it sounds like we in SDR run the largest, fastest, most demanding courses. Many regions seem to run AXs where the top speed might be 45 MPH, whereas our AXs are almost Time Trials without the passing, and some cars are nudging triple digit speeds. So, when we talk about "parking lot AX" events, these may be a lot more stressful than an AX in some of the other regions.
Throw on a set of sticky and/or larger tires (non-Porsche approved), and now you are regularly putting the cars into cornering stresses well beyond anything they would encounter on the streets (or were designed for). Not long ago, tire limitations would have prevented some of those stresses (i.e., you would slide long before the oil was pooling in the cylinders), but now we can get street tires that are holding the road at much higher speeds and cornering forces.
Robert - your post was the first time I have seen an "I was there" statement regarding PCNA (or a dealer) claiming the warranty didn't apply due to "racing". Every other story always began "I heard..." or "Did you hear...". Unfortunately, without some details, none of us can judge whether PCNA or the owner was in the right (or somewhere in between).
Some key questions (I would hope most of these could be answered without violating whatever confidentiality agreement you might be under):
What kind of hearing was this?
What was the warranty problem being claimed?
Was the car driven with Porsche-approved wheels/tires?
Had there been any suspension or other modifications to the car for track use?
Was the car driven only in AX events, or was it also used in DE/TT or other track events?
Did the DME show a large number (say - over 1000) of Zone 2 over-revs?
I doubt whether PCNA is behaving in bad faith - there are enough verifiable cases of local dealers performing warranty repairs on cars that were obviously tracked. Therefore, I suspect there is something more to this particular story.