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The cam phasers make noise on the 5.4 and 4.6 and its a pretty common problem, I would think that would be covered, but they are probably saying that is has not completely failed. You would think that they would want to repair now before it fails completely and then the entire engine needs replacement. That is how it goes though, I have to deal with exteneded warranty companies on a daily basis, so I see this alot.
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The long term affect could be rough running, noise, misfires. Check engine light could come on. Yes that sounds about right for that job.
Hello again Dan here,
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