SHN will have to comment on warranty question. With enough heat to melt the case repair sounds problematic. A call or email to SHN support would be a good idea. However, regarding stacking of Insteon units, I’m pretty sure Smarthome has recommended against that for just that reason. It prevents the units from dissipating heat. The same reason they de-rate the in wall dimmers if installed along side of each other. The pass through outlet is there to allow for plugging in an appliance cord rather than another Insteon unit. Sounds like you have been doing this for some time without a problem but I would stop the practice. It would be a good idea to add some additional outlets so that each unit can be in its own outlet.