I fear the Nokia care guy was right.

You said:
"4] Placed the battery on n900 not inserted.. (half inserted)"

I wonder how this "half inserted" looked like.

I do not know and I do not want to try it on my N900, if it is possible
to half insert the battery the wrong way thus connecting
plus to minus or vice versa.

Looking at
http://www.flickr.com/photos/thp4/4169413835/
http://www.flickr.com/photos/gubatron/4627412953/
http://www.flickr.com/photos/gubatro...n/photostream/
I'd say it is hardly possible to put the battery into the N900 in a
way to shortcircuit via contacts.
Maybe getting contact between +(Batt) and -(N900)
and -(Batt) and o(N900) is possible in certain circumstances
(leaving + of the N900 empty)?
Maybe Nokia should have put some distance between
'-' and 'o' contacts?
But the battery compartment is so narrow.