There is legislature to protect you in this situation. I don't know enough about it to be the person giving you first-hand advice, but I did some poking around before modding my old cobalt (was under warranty at the time). Definitely push for the repair.

According to the law (5 years ago when I read it..), if you've modified your car then the manufacturer has to be able to prove that your modifications have caused or encouraged the damage. Obviously, there isn't a high-flow cat in the world that will stretch a timing chain. And he forgot the third possible cause of failure: Mitsubishi facked up!

As for next steps... this is when someone else needs to chime in. I would call head office next, but then I get a warm fuzzy feeling when I get to tear a strip off "the man" (or one of his underlings).