Hey Perdurabo I have the CAT bypass in place as well. I was actually thinking without the baffles and CAT to absorb some of the heat this could have been the problem. I have not heard back from corbin yet. I will say though I am very happy with the workmanship and function of the bags. I hope they will at least repair it under waranty. I will probably install some heat insulating material now and if they fix the bag as you can't really see that area easily.
Here's the picture
Burnt Beetle Bag