Update on my situation for anyone who cares - after the previous dealer kept with the story of not being able to dictate what happened - yet still refusing to approve the work - I took the truck to another dealer. The original dealer of course tried to advise me against it, stating once ford had denied it, the new dealer wouldnt be able to help. Nonetheless, I still went and picked up the truck - which was a pain in itself and took nearly 2 hours. It turns out that the first dealer never even submitted a claim to ford. My new advisor at the new dealer called me within 5 hours of dropping the truck off to confirm it would all be covered, and mentioned there were zero previous claims under my vin in ford's system.
Internal differential bearing failure was the culprit of the damage in the end. Also worth noting that the approved repair work came in over a $1500 below the original dealers estimate that they suggested I use insurance for. It all seems pretty fraudulant. I am not here to talk poorly on the first dealer by name because their sales side was always great with me (early trucks at MSRP), but take it from me now - its always worth a second opinion if a claim gets denied. I will be calling the original store's GM about the whole situation. He was my original point of contact at the dealer. Given the existing relationship, I doubt he knew this was going on, but he definitely should. I am just happy that its all being covered and taken care of now.