Ok, forget what I said about the washer then... either way, the engine is toast and Horizon will replace it under warranty.
ncgrunt, my logic is this, If I am going to drop $200 in JUST a motor, why not buy a WHOLE truck for $500. The money isn't a problem except for the fact I just spent $600 on a truck that I'd expect to actually USE without constanly sending the motor in for a replacement. If I buy a motor, then that is $800+ for this truck. I too had to choose between the LST and Revo, and you see what I picked. I was a loyal Traxxas user owning a T-Maxx, Rustler, 4-Tech, and Stampede. All of which are still using the original motors with no major problems other than "normal" wear and tear.
It'll come out basically the same either way:
Spend $200 on an engine, and you've spent $800 on the LST. But, you can get say $80 back through reselling your Mach after you have Horizon replace it. So the total comes to roughly $720 spent.
If you buy a Revo, I assume you'll try to resell the LST. Even if you get Horizon to replace the engine and add that back in before reselling, I would be pretty surprised if you got more than $400 out of it. So here you've spent $600 for the LST, plus $500 for the Revo, minus $400 for selling the LST. Total spent? About $700.
Aside from pointing that out, I'm not really going to say much else. Like I said before: your money, your choice.