"From what I can take from all this; The US is buying a helo that all of a sudden didn't meet it's spec for carrying the President. Therefore, the US will now pay to have the helo re-bladed, stretched, re-engined, new rotor(s) and all at taxpayer expense?"
I don't take that at all.
Delays due to system integration complexity, an increase in the required capability of the Increment 2 aircraft, an increase in cost because it is now cheaper to build 5 new Increment 2 airframes than re-engineer the 5 Increment 1 airframes. All these I have read about.
At the time of the VXX announcement, Navy assistant secretary for research, development and acquisition John Young said both the US101 and VH-92 would need rotor and drivetrain improvements to meet VXX Increment II requirements. - AHS International
So neither of the base aircraft could meet the Increment 2 requirements.