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If nobody got better than MSRP I would willingly pay it but assuming at least half of you are honest I'd be a fool to do so.

Half the folks here are foolishly half honest, the other half are a few shrimp shy of a boatload. PenForHire, Welcome to the board!

Regarding MSRP-happy dealers, it may simply be that the Cal dealers are faced with a high cost of living, can't afford to discount, and they are simply passing this on to customers with no ill will. But your following point refuting this is excellent:
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assuming low-ball pricing gives a dealer $400 gross profit then what is so wrong with asking for a deal that give's 'em $700 - $900? Is that insufficient margin? I might believe that for a product that must be inventoried but not for a ship-to-order like a PDP order.

The PDP program lifts the burden of 'guessing' the right inventory from the dealer. They just process the known orders and do an easy assembly & delivery of the bike. Sure they have a building to maintain and employees to pay, but the floor bikes, ATVs, and merchandise stocked (higher risk) should reap the higher profit margins. The FJR represents a small niche market that will not make or break them. Heck, its easy money.

A dealer should be able to factor in the profit from additional sales by lowering the price a smidge. They are lucky to find (and should seek, entice) customers willing to WAIT for the FJR product and thus eliminate the worry of unsold inventory. They should recognize this as a unique situation, with savings and good will passed on to the customer.

Good luck in your quest for a fair price.