Yea the turnbuckles arent the best thing on the market, but they do work. Never had issues with mine on my 3400, but they are a tad different and on the outside.
It does indeed look like a bad weld. And a combination of the un-even ground, possibly they were too loose and let the BH swing pretty hard one direction, or possibly when turning, the BH could have dug into the ground??
It really dont matter how it happened though, if the tractor is under warranty, your dealer should definataly replace for free unless you choose the aftermarket route...