Phil Wood Hubs: Anyone had a Pawl go?
Phil Wood Hubs rarely have issues. If it is the pawls that are the problem, a rebuild kit will be enough. They are replaceable parts. They are the "teeth" that the freehub use to drive the hub shell (and the rest of your wheel) forward.

Let them try a rebuild. You won't lose anything by it, and it will be faster than an RMA. But if you continue to have issues after, then warranty the hub.