Thanks for the replies guys. In response to some of your questions, the water loss is the better part of an inch in 24 hours with the pump running. When the pump is off for 24 hours little (probably no) water is lost. Also, when the pump is off, the water drains slowly out of the spa into the pool to a point just below the tile line. I told the builder this on the phone, and he charged me $105 to come out and confirm that this is where my leak is. I'll try to get home before its too dark to take a pic tonight.

Kelly - I really appreciate you input on the contract - I was hoping to get your input on that part of this, and its good to hear your contract is worded the same. However, the use of the word "external" is what I find questionable in this context. The wording is that "it will hold water" (which mine is not), and then the exceptions are things that are "external". It seems obvious to me that something that is constantly submerged in water when the pool is running shouldn't be considered "external". Isn't the plaster covered by this warranty? Why is it not "external" - its not part of the shell... If something this integral to the pool is considered external, it leads me to wonder what (if anything) *would* be covered by this warranty. Of course, I *am* biased on the matter, hence my seeking outside input.

As an update, the PB's manager over repairs called me yesterday and said that he thinks they can rebuild the stone spillway (and hence fix the leak) for about $300 instead of the "rough estimate" of $700-$800 I was originally given. Thats enough to still irk me on a 3 year old pool, but obviously much better than the original quote. Of course, the workmanship of this repair is only guaranteed for 1 year, so I might be right back here in a couple of years...