Robby:
I did a google search for lemon law. Here is a site that has everything listed:
http://www.carlemon.com/lemonstat.html
From what I read, there is an amount payable based on how many miles were on the car at the time you FIRST made the complaint of the problem.
Using your number of 7,400 miles, here is the calclulation. Where they came up with the 120,000 number I have no idea....
7,400 / 120000 = 0.06166666
if you paid sticker price of $35,500 for the car, then
35500 * 0.06166666 = $2,189.17
So the dealer's claim of $2,300 is pretty close, assuming that you made no complaint about the problem until there were 7,400 miles on the car.
read everything on the site, and there is a lot...
Good luck.