Thing is you had a great board. I wouldn't personally have expected the P35 DS4 as a replacement but i would expect the DS3P as it's the closest combination of performance and value.
They really shouldn't turn that replacement request down TBH!
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Why swap a DS4 for a DS3P? If I was going to argue my case in front of a small claims adjudicator I think it would be easiest to prove the P35 replaced the P965 in Intel's line-up and Gigabyte replaced the P965-DS4 with a P35-DS4. They both retailed for roughly the same price point, and they were both the second-top board in the line-up after the DQ6 at the time of manufacture. I believe that those facts would convince a reasonable person that my case was valid.
They would have to argue that their offer of an NVidia chipset motherboard that retailed for substantially less, and has a significantly lower specification was reasonable, and I think most people would think it wasn't.
Job done. It doesn't take long to get a hearing and they usually don't even turn up.

