To answer your question" is Apple trying to f me over?", YES. Smokers get blamed for a lot of things but this is pure BS. It was covered. Call Corporate Apple and ask for a supervisor, explain that you were denied rightful warranty work and ask for a "Warranty Exception".
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But it seems they have done just that: http://www.zdnet.com/article/apple-to-smokers-butt-out-or-void-your-warranty/
To answer your question" is Apple trying to f me over?", YES. Smokers get blamed for a lot of things but this is pure BS. It was covered. Call Corporate Apple and ask for a supervisor, explain that you were denied rightful warranty work and ask for a "Warranty Exception".