I appreciate the comments and advice from everyone, but again the point of this thread was not to get advice on how to get satisfaction in this particular case. The retailer has a clearly-stated return policy and I do not anticipate any trouble with them as their rep. is excellent.
I was hoping to hear from some other folks who have rejected and/or returned swords in the past due to similar issues and what the issues were.
I have not had the opportunity to study antiques but I am fully able to believe that shims were used to tighten the fit on original swords. Whether or not this is typical or may detract from the value of an antique is something on which I am not qualified to comment.
On the other hand, I would venture the opinion that this is not an ideal way to fit parts on a high-quality sword, be it antique or a repro. If one is replicating original swords and claiming a high level of quality I really don't see the point in choosing a shimmed fit when a properly fitted guard is superior for aesthetic reasons, if not structural ones.
I guess it comes down to individual expectations, but this kind of fit and finish dosen't earn my money.

Just to follow up, I heard from KoA and they will accept a return, no questions asked, which is as their reputation a nd return policy indicates.
They also told me that they were contacted by the maker after they (the maker) saw this post, and who expressed regrets that I was not happy with the sword. The offered to fix the issue if I wish, which is also no less than their rep. would have led me to believe.
For the reasons I have stated earlier, I am going to ask for a refund. I have no doubt that the maker would make the effort to make it right, but unfortunately due to the fact that they tried to shim parts to begin with, I am not sure that their workmanship is what I am looking for in adding to my collection and I will probably just buy elsewhere in the future. I hope that this is an isolated case and that they will take their customer's money seriously enough to not let this happen again , but I won't bank on it and send them my hard-earned cash in the future.

I wonder if the comparison to antiques is germaine to the problem at hand. Primarily, with an original no one knows when or why the "shimming" was done. Was it part of the initial manufacture(a possibility)? Was it done as a result of a rehilting or repair? What was the perspective of cutlers(I use this term as blade makers often worked independent of the cutler) concerning this practice? We can't know that(at least presently).

As to a newly made sword...not acceptable. Especially when the ability for consistency is worlds more controlled than anything an ancient sword maker would dream of. There really isn't an excuse for a modern sword maker to say that is something that can happen. Someone dropped the ball in QC. Plain and simple. That's why return policies exist and should be utilized IMO.

Glad to hear everything is resolved. It is also helpful for some of us to know that KoA is standing by their "No questions asked" return policy. Thanks for the information.

I wanted to follow this up again, I never inteded that it should become a focused discussion on my current issue but having allowed it to go that way I think it only fair to tell the rest of the story as it comes about.
After hearing a lot of advice from other sword buyers, hearing from the maker, and giving things some more rational thought (I am passionate about swords or I wouldn't be buying in this price range), I am going to send the sword back to the maker and let them fix or replace it as they see fit. It is easy to feel jitled when an expensive toy dosen't live up to one's expectations but on the other hand I would not want to be judged on the basis of one of my lesser works (especially not by someone as critical as myself) and would rather do something over and over until it is right, than to have a permanently unsatisfied customer. Were I a little less exciteable about thse things, I probably would have come to this conclusion earlier. Thanks for all the replies, I will follow this up again when there is a final outcome.

Justin, if you have talked to the vendor and reached a satisfactory conclusion with them is there any reason not to name them now. This is a serious issue with regards to your concerns as a consumer and to have the other party undeclared leaves people to speculate who it may be within a fairly limited community of manufacturers.

A question that may be relevant in the context of time is when was that sword manufactured and has the manufacturer improved on the methods that led to these flaws since then?

As I said, my feelings about this are mixed. I stated earlier in the thread that I wouldn't and I am going to stick to this. As a part-time maker who is on the margins of the industry I think it would be inappropriate for me to do so, I can't explain exactly why but there is a moral issue for me. It should be mentioned that this may also make me a much more critical judge than the average customer.
I want to state also that I have no reason to doubt the functionality of the sword. My issues were entirely cosmetic and could be avoided with fairly simple changes to production methods. It has also been pointed out that shimming is not ahistorical, and, my personal opinions aside, many collectors may not have batted an eye at what I percieved as serious fitting flaws.
The maker has stated that they would be reviewing some of their production processes so this may well be a fluke. I am looking forward to recieving what will hopefully be an improved product. I won't comment further until I have it in hand.

Fair enough, it was just that I can think of very few companies (including one I buy from and will continue to buy from) that fit the description you gave, and in such a limited field as stetd before speculation can be damaging as the odds are against the potential subjects. I can fully understand your view as another industry professional.

I don't think you were being too picky, the flaws sounded more than minor to me and I am neither an industry professional or even a person who has a great knowledge of swords. I'm just another person who wants the best modern reproduction historical swords available.

Further to this are there any topics that deal specifically with the shimming descrided and when it can be expected to be present in a historical sword or not.