I seen a DVD at a store recently on WEBER products and their stringent product quality controls and that all products are visually checked for imperfections before packed and dispatched.
So it makes you wonder if somebody was just being a slacker that day that yours went through or something is amiss at Weber.
I guess some things can slip through the checking stage and some transport companies are a bit rough with items at the depots especially when they may go through a series of relay depots before it gets to your home.The cartons get thrown,kicked,fall off pallets just to name a few things that happen at Transport depots.
It's kinda hard to think something as pronounced as that big chip off the side of the lid can be missed while packaging. My Old OTS lid is a bit like that but that's my fault because i dropped it on the concrete once and it chipped but is in still good order and hasn't rusted and it'd be an early 90's model i think as it still has the wooden handle which also is in good cond.I use the OTS as my chimney station while I'm cooking on the Performer.
The bubbling inside could have been missed easily if the light wasn't good and your right,it may not stand up to the heat but hey, it has a 10 yr guarantee hasn't it? Use the kettle and when things start to happen, claim it against the warranty.
I'm sure that Weber will come good for you in your case...just hang in there but don't forget to give em a bit of a serve for letting something like that happen in the first place.
Cheers
Davo