Since there seem to be a huge number of misconceptions concerning the whole hydrolock issue, I would like to put forth some info in the hopes it will help understanding. I just hate seeing all the "CAIs are bad" threads.
Every engine has a certain amount of unfilled volume when the piston is at top dead center (when all valves are closed). Remember that fluids are non-compressible. In order to damage an engine through hydrolock, it would have to ingest a larger volume of water than the empty space can contain. Pretty simple.
Now, take a look at the intake. I can't give actual numbers here but will try to lay things out in general terms. When talking about pumping fluids, there is something called suction head. This is the distance the fluid has to travel in order to reach the piece of equipment that is doing the pumping. The higher the head, the more the equipment has to work in order to raise the fluid. Based on my experience as a ship's engineer, I doubt the engine is providing enough pumping action to suck in enough water to cause damage when driving through rain. Plus, remember how hot cylinder temps are and know that small amounts of water will be vaporized and burned with the fuel.
I can't say for sure without testing, but I imagine that you would have to be revving the engine a lot while the intake is submerged in order to get it to hydrolock. You would notice the engine stumbling before it actually got to that point (due to the water ingested leaning the mixture).
For the OP, I agree with those who have posted that the dealer is blowing smoke up your pant leg, for whatever reason. You can check to see if water did in fact cause your engine failure as others have said. I wish you luck in getting your problem resolved.