Well, a happy ending to this story. My wife went to the Victoria Gardens Apple Store (in Rancho Cucamonga, CA) and told them what happened at 2:20pm. They said that they could squeeze us in at 4:30pm. At 4:31pm sharp a super nice Apple Genius named Josh asked us to come on back to the back table.
I told him exactly what happened how we had terrible battery life, Apple said our battery was green at the other store, so we just decided to pay for a battery last night and on our way to the car the phone rebooted and half the backlight went out.
He said how he really wanted to take a look inside, but once he saw our file and how we had AppleCare+ he said: "I want to give you peace of mind." Went in the back and came back with a brand new phone. While setting it up he said he couldn't believe what the other Apple Store did.
He also said that they aren't supposed to replace batteries if it shows up green.
In less than 6 minutes we were out the door with a brand new iPhone for my wife for $0. I didn't get a refund on the battery but oh well.
WOW. This store has restored my faith and made up for the horrible experience with two other stores.
And that Apple Genius - Josh. Apple Employees like Josh are a big reason why I will continue to be an Apple customer.
Happy ending! Lessons learned.