Mine had zero play but, it squeaked like hell. This is why they squeak...
Eventually all that rust will wear down the bearing surfaces and there will be play but, it's possible to have a joint without any play that is filled with rust (as you can see above).
As for the warranty, I wouldn't count on them replacing a u-joint. The front hub maybe but, I'd almost bet they would say your u-joint was a common wear item (not covered under warranty). If your not over the mileage on the warranty, I would still check with the dealer. I've heard of dealers doing customers a favor when they are slightly out of warranty.
Actually a bad u-joint is probably a blessing, it's probably the cheapest squeaking part to fix. IT was less than $20 delivered to my door from RockAuto.