[Call corporate. At first they may offer a refund on your AppleCare
never seen that happen. they can't just refund the price of your insurance to avoid paying out on it. that'd be all kinds of illegal.
(That's slolerner whom you quoted, not me.)
My first thought was a full refund of AppleCare, but I quickly realized that I'm entitled to a fully functional Mac.
If they can engineer a battery replacement, so it goes, but if not, a new computer is the only really acceptable answer; the very significant discount on a new Mac that you suggested doesn't really cut it.