They are obviously trying to avoid a law suit, and the negative publicity that goes with it, and the recall/inspection that something like this may bring upon them.

Yes, you may be able to sue them if you go to a lawyer, but in this sue-happy days...I personally am not in favor of this. Don't get me wrong... I believe law suits do serve a purpose... they make sure that manufacturers don't cut corners and this and that... but in a case like this, I would personally just take the cash offer (for the hell of it) and sign the release form.