The lt-1 dizzy is the opti spark if i remember correctly. bad enough its a crap dizzy system, but i believe they positioned it directly under your water pump. Make sure your not leaking water from the weephole of your water pump, that leads to it failing as well.
The infamous opti spark.... cant tell you how many hundreds of them I have replaced since I lost count after the first hundred. Many things could be going wrong and we will cover the most common. First, if you have an intake, the kind that scoops up air from the bottom behind the center airdam, drop that system like a bad habit, it draws in too much moisture as is. Next, see if the vent hoses are feeling the the rubber is swollen or they are dry cracked.
Either way they SHOULD have been replaced, they are still available from GM. Another common thing I find when A dealer installs an opti and tried to flat rate it, they dont always re-install the vent lines correctly, they are easiest put on right before the opti is bolted down all the way, this allows you to move it around and to get the clams onto the opti from the vent lines correctly.
After the dealer has been on this X amount of time they try and short cut it, they simply slide the vent hoses back onto the opti and dont clamp it. While they will likely stay on, it does not create the proper seal without the clamps to protect from moisture.
At any rate, they should not cut off your warranty because they cant figure out the problem, diagnosing the problem lead them to recommend you replace the opti, sounds like they jump to soon with a not so complete diagnosis.