I think they will exchange a new one for you. Few years ago, I have a iPod 4G. One day, I drop the iPod from 1Metre high accientaly, then the harddisk broken down and shows a sad iPod icons only. (In fact, I have a silicon case for my iPod and therefore no appearance damage on my iPod). Then, I go to repair centre and told them the harddisk in my iPod not working.
After that, they exchange a new one to me.