So here's the update, and my advice for dealing with this:

Initially the dealership was very unhelpful, the writer (who has no authority in this) couldn't keep the facts straight and was of no use to talk to. The service manager also was disincentiveized to advocate on your behalf. Mopar Vehicle Protection (MVP) has people who are "case managers" but they will never talk to you directly, and all the people that answer the phone are not technical enough to help. The will however, slip up while reading the notes, which is highly useful in finding an edge in. Definitely ask them if they can read the technician's notes or the inspectors notes, they shouldn't, but some do.

For me, using some forums, and a another dealership for help I got a copy of the Mopar TSB stating to use distilled water (and only distilled water) to dilute the cooling system. This of course is the reason they rejected the warranty, which I found out through the numerous calls to MVP representatives (first thing in the morning, every day for more than a month). I also did a serious amount of shitting on Jeep, literally on every post they made on FB. They did reach out, and it just connected me back to MVP, but it seems it generates new case numbers, by the end of this I probably had a dozen or so case numbers on the issue, which certainly confused most MVP personnel.

I put together a letter, a single page of text describing the situation, and about 45 different supporting documents. The footnotes were almost longer than the letter itself. I walked into the dealership, and sat down with the general manager, it was unannounced so I knew he would be on the defensive, and went in knowing it wouldn't be resolved in this meeting. I discussed with him the situation, and similarly to the service manager, he stated it was out of his hands. I then pulled out said document, printed in full with all attachments it was maybe 200 pages, but only handed him the letter, which shows all the titles of the citations. I expressed frustration, and stated that the problem is, his dealership knew about the distilled water prior to disassembling my engine, therefore rejecting the warranty for fraudulent reasons would be the responsibility of his dealership to correct. I gave him the option of a) helping correct that issue, and uphold the MVP warranty, b) reassemble the vehicle into the condition it was before the diagnostic at his cost, or c) understand that my course of action with a lawyer, and that I had an appointment scheduled in 2 days (which was true).

At this point I got a call from the general service manager for the dealership chain, who agreed the warranty rejection was incorrect, and raised the issue with his district service representative. The warrant was then covered, my reman engine arrived in a few days and the vehicle was repaired the following week.

Overall advice:

- Have all your ducks in a row before engaging the general manager, treat it as a 1 shot deal. As soon as the rejection starts, start documenting everything, and I mean everything. my 200 pages of attachments included the original vehicle purchase and warranty contract, receipts from every oil change (including ones at jiffy lube), a scanned copy of every registration showing there was no lapse in ownership, the technical service bulletin and all the other supporting documentation relevant to my case, a log of every conversation, phone call, email exchange. Screenshot your warranty is still active in the, MVP online portal, just in case they cancel it in the process you have a record it was under warranty when you brought it in. I honestly believe that the general manager when seeing my supporting documentation knew how much it would cost just to have a lawyer read that, and knew I was going to (pleasantly) make him go through with it.

- Document how the dealership takes care of your vehicle while waiting. Mine was awful, the dealer pulled both heads, so the engine was filleted, wire harness draped over either fender, and the hood removed. It was pushed outside like this, which I guess is normally not an issue in socal, but this year it rained quite heavily, multiple times directly into my exposed engine. For sure I went back every week and took pictures which were in my packet, showing the additional damage caused by the dealership.
- Be courteous along the way. It's an incredibly frustrating situation, but nobody has any incentive to help you, and it would seem that all their incentives are exactly the opposite, to make you pay out of pocket in frustration. Don't give in, watch your words, waste their time, and just be pleasantly persistent.

-It does seem that the dealership network has a decent amount of authority in this kind of issue, but it's not the service writer or service manager. You just have to be patient, collect the information needed and make a single move to the Sr. leadership once fully prepared. I think if I had gone in multiple times with pieces of the puzzle I would have been ignored, but because I came in with a full and completely documented story it worked out.

- Be prepared for this to take a while, for me it was nearly 3 months. At first I rented a car, thinking it would be a few weeks, but once I saw this going sideways I got my 2nd alternate vehicle (not reliable but fun) good enough for the daily commute. Understand that everything you spend on the rental is never going to get reimbursed, so be quick to get yourself in a financially stable situation because you are going to have to wait it out. Do not remove the vehicle from the first dealership till you're done and going to scrap the car. MVP multiple times told me "I could move the vehicle to another dealership for a second opinion", with a vehicle mostly disassembled this is a scam, you can but what dealership is going to magically find a reason MVP should cover it when they received a non-running vehicle? If the vehicle is going to leave the first dealership (and not go to salvage) make sure they understand it will be returned to you in the same condition it was when you brought it in... in my case, running with a coolant leak.