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You did not actually use the water/foreign fluid from within the tank until it was nearly empty. You had to drive the 350mi to get the tank down to a level where the water (or whatever it was) would be sucked up by the fuel pump. Then, when it was, you experienced your problems.
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It is common that foreign contaminants do not get sucked up until the end of a tank of gas.
There is nothing that will prevent water from getting to the engine.
You should have the engine compression tested, but not likely too much damage could have occurred, except to the pump and filter.
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It could be something else, sure. These pumps fail all the time just on their own without anyting else causing it - just flat out die of "old age".
The tank is 18.5 gallons
You did not answer my question about the micron sock on the fuel pump. I have a full bumper to bumper extended warranty and want to know if this mechanical breakdown should be covered.
You did not answer my question about what part of the tank the fuel leaves from. The car has 82,000 miles on it. The car gets approx 30 mpg on the highway so I think it should have had 6-7 gallons in the tank at the time of the breakdown.
There is nothing to prevent water from being sucked up.
The pump picks up from the bottom portion of the tank, but there is a complex system of fuel transfer from side to side that can play into this as well. Commonly contaminents are not actaully picked up until the tank is low.
If the pump can be proven to have failed on its own without contamination it should be covered.
If there is evidence of water in your fuel filter, the pump will not be covered.
If there is evidence of water in your fuel filter, the pump will not be covered. It is as simple as that.