There are a lot of Crossfires out there on the market at very low prices. If this "dealer" won't make it right PRIOR to purchase, you sure as heck don't need to buy from this outfit. What are you going to do if after you buy another problem crops up? I'd worry a bunch about a dealer who, right off the bat, isn't willing to do what it takes to make the customer happy (and do the right thing). (Yes, I realize they're telling you "It's a used car, we're giving you a great price, blah, blah, blah.")

No matter what they may say, you are in the driver's seat in this economy.

I'd ask 'em (friendly and politely) which they would prefer:
A.) fix or replace the seat
B.) you'll take the car with another $1k off (find out what a replacement cost's first)
C.) tell them you're going to "think about it" a bit more. (Don't worry, they'll get back to you).

And, for myself, I'd seriously consider choice C at this point.