Actually, given more thought on it. Since the original dealer bailed on him and the same problem has been such an issue for so long; I'd most certainly expect the company to classify it as a lemon, as well as my money refunded. Kioti can refund the money and then go back on the dealer that left OP high and dry (walking away with 'money for nothing' in the process). OP can then take his money to this dealer who has been so helpful to him and let some honest folk earn their living...
Only way I'd let Kioti replace the tractor is if it was coming off the helpful dealer's lot and he was making what he would on any MSRP sale.
I'd also make sure Kioti knew the only reason I was continuing to do business with them is because of this helpful dealer and ensure they appreciated all this dealer has done to prove them to be an excellent company to do business with, and that if it was left to the opinions formed over the dealer that sold the "junk unit", you'd think the whole corporation was junk. Kioti makes a good unit and they don't want bad dealers bringing down their rep any more than any other company. It's unfortunate, but bad dealers have left stains on all brands in various regions.
I think as long as you "squeak" loud enough you'll get whatever satisfaction you desire, they're a great up-and-comer in this segment and happy customers are too good for the bottom line even when they need to lose a dollar or two on the occasional customer to keep them happy.