Thanks for the comments and advice - hugely helpful! After I posted this, I found out the dishwasher is still under extended warranty through Lowe's (I bought a 4-year EPP, but it's really a 5-year because it kicked in when the KA warranty ended). Lowe's is sending a tech on Monday to give a 'second opinion' regarding whether it should be repaired or replaced. With all of the rust and soap residue underneath and corrosion to the electrical parts, I certainly hope they agree.
The damage to my home is covered by homeowner's (minus the $1K deductible). Allstate wants to collect the unit and go after KA for their out of pocket and my deductible. I'm thinking the info you've given me on similar issues and pump redesign might help them to do that. I would call KA directly but I'm pretty sure that Lowe's will be partnering with them on the repair or replacement.
Will post a follow-up when this is resolved. Thank you again, Masters and Grand Masters - you are the best!