1) The flue gas vent termination should be higher then the combustion air inlet.
2) I would always ask for concentric vent kit.
3) >If that is the case should I expect the company to remedy this and adjust the warranty?
Ask them if they are willing to fix it. As far as adjusting warranty - doubt it.
4) Moving A/C is not cheap. Still 12" clearance will be needed

Thanks for your reply. More questions:

So for 6 years now my "professionally" installed system has been breathing in its own corrosive exhaust. Just how bad is this and has anyone seen failures due to this? I did not go with the low ball quote. I went with a major heavily advertised company in our area because I don't know much about HVAC. I had never heard of a concentric vent kit.

I know it won't be cheap to move - I already have quotes. Are you saying that 12" is far enough away that the exhaust will not harm the unit? Is it OK to cover it?