I hear ya man. I had to have mine replaced by the dealer. They were actually pretty cool about it, but I found out they replaced it with OEM crap and it's already starting to crack again. At 3k I had to have them replace it the first time. My was flaking and cracking just like yours. Now at 30k on my 05 I'm having issues again with the seats they replaced. I'm going to have it out again with them next time I'm in for service.
Here are some pics after they fixed it.
