I never got a chance to discuss weather it was a repair, replacement or return for refund - I just got an RMA and pre-paid return label with instructions. So I followed the instructions. I just assumed they would send a replacement once the faulty unit arrived at the return location. Instead, the day after I dropped the unit off at the shippers, I got a refund notice first from my CC, then from HP. It seemed clear that at that point HP was done with that order.
The note tucked in with the unit regarding non-support for units ordered without graphics cards may have been the reason replacement was not an option, I don't know. I quickly skimmed the note, sent it back with the unit and the other docs that came with it, so I don't have or remember any details regarding the form that non-support would take, so this may have just been SOP for faulty unit deliveries.
I think the price increase was likely due to processor or memory price changes - seems those are commodities like gold where prices fluctuate frequently. Whatever the reason, the deed is done, and hopefully I'll have the next unit before the end of the month.