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What model of vehicle do you have? And what is your question, just confirming that what they are saying sounds plausible?
Did they try leaving it in the shop to fully unfreeze, and then flush the fluid out? You didn't have any warning lights on when you had the car running?
How cold did it get in your area? I can only assume they are saying that the fluid absorbed water from the air over time, and when it got cold the moisture froze in the lines. I would think they would be able to flush the system out once it was thawed in the shop, new fluid, etc.
I wouldn't think so, but they have their eyes on it- there may be damage caused that I can't see, lines cracking due to ice swelling them, etc. There are lines on the outside that transfer pressure from one end of the rack to the other, and they are integral to the rack and not replaced separately.
Is $1500 the installed price with labor? Because that is not too bad.