Okay! Here it is... Update from the gunsmith:
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"The slight burring has been caused by someone spinning the cylinder and not stopping it properly. Done continually, this will tear the notches. This cylinder is truly not bad. The factory will not replace the cylinder under warranty as the marks are very slight and will occur during normal wear and tear."
I guess my question is, who was spinning the cylinders as this was a brand-new gun. Would S&W use used-cylinders?
"The extractor rod wobble I will correct under warranty. I will also cover return shipping costs to you under warranty."
Excellent. Better than finding out it was acceptable as well.

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So, there you have it.
If S&W wouldn't let this cylinder leave the factory in that condition (key word being "If"), then either someone at North Sylva Co. or Ellwoodepps is abusing product then selling as new which seems unlikely since a few users here also have the same problem.
Logically it would seem that S&W really doesn't give a **** about Canada and is sending garbage up this way (i.e. used parts); I am leading towards this since there is a confirmed 2000-unit difference between S/N of the same model destined for Canada as a "Special Run". Total BS!!!
I'm glad the rod wobble is good for warranty. I'm upset about the cylinder, but I was given the option to buy a new one and pay for it and the labour. Better than nothing I suppose, but puts the price of this gun much higher than anticipated.
At the end of the day I've learned the following things:
-Ask for pics before buying from a dealer (sadly).
-Ask dealers policy on returning guns if not satisfied; I'd much rather get my money back at this point.
-Being first isn't always a good thing.
Next update will hopefully answer above questions with an ETA on return time.
~Cheers
Big +1 to Murray for getting back to me in a timely manner.