a lot of people are recommending this and i am not opposed to the approach. it makes total sense. any idea on how much i could expect to pay?
i presume i could still warranty the defective brake and keep/sell it if i decide to so i wouldn't be 100% out of pocket.
Honestly, I am not sure. When I did ten minutes of internet searching, it looks like your brake is an Acera, but I couldn't find anyone selling it. You could move up to Deore 6000, but you need to pay a little attention. It looks like the brake levers on the Accra's are longer than some of the other brakes so you might end up with a different feel if you don't get matching brakes. Also, I saw one review where they mentioned that the Acera rotors were only for resin pads (it would be marked on the rotor), so double check that and make sure you know what you are dealing with.
Shortening hydraulic hoses is pretty easy, and the Shimano bleed kit is cheap - definitely something you could do, as others suggested.
Edit: actually, there is a seller on eBay selling a pair set of Acera brakes for $60.99 with free shipping (rotors cost extra). You would have an extra front brake, but it would get you a matching rear brake. You would still need to buy an olive/insert, a bleed kit and mineral oil (if it doesn't come in the bleed kit - I forget).