Woohoo! When filling out the repairs form I just realised that I've been looking at the wrong receipt - I was looking at the one for my old PRS-350 ( which ironically died the same way as the T1).
I just found my T1 receipt and I'm still in my extended warranty!
Phew. Disaster averted :-). I'll contact the Sony store tomorrow to see about getting a new reader.
Thanks for your help guys :-)
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