That sucks about the whole experience. I have a 2002 GMC HD that I've had for about a year without any problems. I hate to hear about stories like this I know how expensive the damn things are now that's for sure. Sounds like they are at least trying to make it right? I've had 3 new trucks in the past 5 years and have not had any problems with any of them. Sorry to hear of your misfortune. I believe you are correct about the lemon law that you have to have the same problem 3 times in one month before it's officially a "lemon". I'm not sure on the procedure and not sure if it varies between states or not?
Good luck and sorry to hear of the awful experience.