I received the repair estimate this week, more of an apology, actually. The zoom mechanism needed replacing, and the cost would be as follows (prices in Canadian dollars, subtract 15% for US$):
Total cost $337.05, which includes a 6-month warranty. Getting a refurbished S1is would be about the same price, but would come with a 1-year warranty.
What to do, what to do...
While I was waiting for the estimate, I considered my options. I was on a trip to San Francisco, and used my first digital camera, the 7-year-old Epson PC800. I quickly decided that a point'n shoot camera is out of the question. I need the long zoom lens and the swivel viewfinder!
Next temptation: Canon announced the S3is with a black body. Tempting, but the S2 and S3 both use SD memory cards, and I have quite an investment in CompactFlash cards, which the S1 uses.
Upon my return from the trip, the decision was made: buy the refurbished S1. I placed the order today, and I'll let you know how that turns out.