first thing you want to do in order to protect yourself is to get a copy of the original (dated, and signed by dealer and by you) predelivery inspection (PDI) checklist. You should have signed that when you did the paperwork. If not, they (dealer) could easily cough one up for you to sign now, backdated. If they don't have the one (or a copy) you signed when you took delivery of the tractor, then there's strike one. In other words, there is no proof that they properly did the setup and PDI.
If you have the original PDI, and everything's checked, then it opens up possibilities. Maybe the dealer can say "you hit something"--in which I'd say "where's the evidence". Or they could say, "it's been vandalized"-which I'd say where's the proof of that (did you find the drain bolt? Look at the oil trail, shouldn't be too terribly hard to locate. Does the drain bolt have a copper washer stuck to it? Does any part of the bolt have wrench marks on it? Does the drain bolt have any evidence of it being struck by foreign object debris?
And lastly, for now, an engine replacement isn't the end of the world. They're not terribly hard to do, and if the dealer has any worth, they can knock it out in a day (after they have the supplies and parts on hand) and you'll have your brand new tractor again. The bigger issue, is that you have lost confidence in the dealer and with Kubota in general, and with that in mind you can call kubota's customer service and vent. They need to know about the situation before the dealer calls their tech support if possible.
