Wow, thanks very much for the help! Yes, the reels are like mrfixit says; the mechanical part of the hydraulic joint is way out separate from the sprung part, so you don't need to mess with recoil part of the unit to work on them. It just floats and the hoses keep it from rotating.
I can't detect any play in them so I don't think they're worn, just that the seals are old (extension side has a minor weep I might do at the same time). Even if the repair didn't last long normally, I think it's worth doing since the forklift sees little use. Records show something like 10-15hrs / month.
Up to now I've gotten pretty good service from the local dealer. This experience has been a bit disappointing, but I suspect their hands may be tied in this case.
I'll let you know how it turns out. Thanks again!