I needed to get them up and running quickly so I bought a compatible q-see dvr from ebay. I did not have the time to send it back to q-see and wait for repairs nor switch out all the cameras. I figured it will be under warranty for 2 years so i'll use it until it dies and then switch out the whole system.
I did call Costco and they said there was nothing that they could do. The extra warranty they provide is for other electronics and excludes camera systems.
I'm thinking the 2TB hard drive may still be good, not sure if i can add it to the new dvr.