Work arounds for licensing pain

I got a question from a reader about a licensing issue, I have no idea on, so I thought I'd throw it out here to see what people think and what ideas they have. Here's the lay of the land:

1. William bought a PC a while back that included an OEM license for Windows XP.
2. William wanted to upgrade to Vista, so he bought an upgrade license.
3. As part of the upgrade process, William replaced the motherboard in the computer.
4. XP got very mad at William for upgrading the motherboard and stopped working. It was at this point that William determined that he had a "recovery" disk, not a real OS install disk and the original vendor of his PC is out of business. Unfortunately, that would wipe out his data.
5. William grabbed another XP Home Edition disk he had to "get the system going" so he could install Vista.
6. Rather than the expected 30 days of grace, XP forced him to "activate" immediately. Of course, his license key didn't work for that since it was for the OEM version.
7. William called MS and their answer after an hour and half on the phone (not including waiting times) was "go buy a new copy of XP as the OEM computer manufacture is out of business and that key is no longer valid".

As an aside, William isn't a n00b. He builds and upgrades systems for a living.

What is William to do? Is it reasonable that the copy of Windows he bought with his PC is only valid as long as the company he bought from is still in business? Is there any way that I can get this system going with out having to put out more money? Is there a work around that gets William what he paid for?

Here's a few thoughts I had:

• Call Microsoft back and escalate. You might get some sympathy somewhere.
• Replace the hard drive, recover the OS on the new drive, upgrade, and then copy things over.

Can you suggest others?