Just a follow-up... Horizon Hobby did offer parts to replace any that would be defective, but since potentially any electronics might have been damages, they suggested I send the full unit back with the two batteries and they will have a look at it and either repair or replace. Right now, it looks like a replace for <smokey> the blade

. I did call the hobby shop and said I would keep them informed and that I wasn't very happy since it will cost me 15% of the cost of the heli to return it, and that without even having the main rotor turn over once (I did move the right hand controls with some reaction.)
So far, I'm quite happy with Horizon Hobby's offer. More later.
Gilles
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Hoping to fly this summer...