only a disk failure at rename-into-place time should cause a rebuild.
I think this is what happened. Took it out for another ride, and had 5 different times where the unit stopped playing music, then would resume a few minutes later. The last time it happened was when I was off the motorcycle taking a break, and when it did, I pulled it out to hear the drive repeadiatly clicking, trying to seek data. Oddly, that was the last time it did it, and it worked fine for the hour ride home.
Still didn't trust it though and took it back to Best Buy to be replaced. Got a new Karma, and $20 back for the price drop that has occured. Though I fear I may be replacing this one soon too, as the first attempt to upgrade to 1.41 (from 1.07) resulted in a loud click of the hard disk and a bad karma, hard disk not found error. Second attempt worked, but that one click hasn't been the only one I have heard. All with no music loaded beyond the demo songs at this point.
Care to hire me to weed out the defective hard drives? :-)