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Failed as in no response to commands or failed as in oil everywhere?
Was it replaced with the updated version or the original?
The older style has a potentiometer sensor for the suspension strut. The updated shock uses a hall sensor. The ZFE requires an update to recognize and control the newer shock.
No Idea, the shop that did it is not aware of any updates. They just ordered the part and then spent all day trying to get the computer to recognize it. It was replaced last Aug. 2009.
Most likely it was the newer style unit that's why they issues getting it calibrated. I would get yourself back to the dealer as it should still be under warranty. If they are not aware of the update you may want to consider another dealer. They will probably try to reset it to get control over it. But it may be dead too.