The warranty varies some by state; California being longer.
You REALLY need to contact Toyota corporate and/or see another dealer.
If you are only 1,000 miles past the battery warranty, Toyota might bend a bit.
It is kind of unusual for the hybrid battery to fail at that age and mileage.
If it really comes down to you having to pay for a new battery, shop around a bit; do some internet searching for "hybrid batteries" and similar.
IIRC, others have reported getting replacements installed for around $2500.