I took apart the rear end to see how the bushings and pivots are doing, so undid the Horst links at the dropout and pulled the sections apart. I was amazed to realise that they were under some strain while attached and have a natural sideways misaligment of maybe 10 mm. The chainstay section has slight play and knocking at the BB but that's nothing compared to the bad alignment. It took quite a bit of force to get the thing back together.

The bike is almost new and hasn't been damaged in any frame mangling smashes so...should I be worried by the misalignment or the knocking?? - I remember reading someone's thread (which i've been searching for - no luck) on BM saying they'd had a frame replaced because the shock slider had worn on one side. This was caused by rear swingarm misalingment. There's no way for me to tell if the suspension action is impeded but it can't be good for the moving parts and the wheels probably don't line up exactly either.

Has anyone experienced similar, and is it cause for return under warranty - ie poor quality workmanship - or do i have to wait for it to break??

without seeing the bike it's difficult to answer your question but I'd say the rear end on a new frame shouldn't be as you've described and assuming you haven't caused the mis-alignment yourself in any crashes then it sounds like you have every reason to expect a replacement as it seems your frame was faulty when manufactured or put together.

Richard:Have had bushing prob on my 2003 Giant NRS,lots of sidewards play,changed the bush in the pivot only to get play in it again.One strip down later I noticed the chainstay has a lip worn in by the bush which was caused by either the chain stay or seat stay being bent or mis-aligned on assembly.The aluminium is worn on the chain stay so it needs replacing but having both stays replaced because you cant tell which one is faulty.Luckily for me its under warranty but will still necessitate a rebuild on my part.All I did was ride the thing!!

Just stripped my 2003 enduro and i have the same problem as Richard Herberth Local dealer say this is normal but a think not. You can see the swingarm twist when i force the links together.

No you're right, there has to be something wrong. My FSR appears fine with about 1000 miles ridden, luckily. I'd take it back and insist on a replacement.

Frames are often 2 or 3mm out. At 10mm I would want a letter from the manufacturer saying it was normal or repair/replacement. The implication being I would make the letter public.