It sits in there perfectly and fits exactly how a paper filter would. Believe me, it is the correct filter - I spent quite a while trying to find it in stores and eventually had to order it so I made 100% sure I was ordering the right thing.
Rant time:
I'm not a moron - I've done quiet a bit of work on my previous cars from tune ups to head gaskets to trans work but I just wasn't sure why this guy wanted to be a jerk and make a big deal outta my air filter so I figured I would check with everybody to make sure - seeing as how these cars are a bit more "picky" than my previous cars.
Thanks to everyone who replied
He called me and told me I needed my valve cover gaskets replaced and a coil replaced without even looking into whether or not it is under warranty. He quoted me some outrageous price and (thanks to this site) I knew it was covered by the extended warranty. I told him this and he kept saying, "Well I don't know about that. I need to call Ford and work this out."
About 2 hours later he called me back and seemed kinda pissed that I was right and admitted Ford would cover the work. Then he started on a slew of other things that "should be done." This is when he told me I needed an air filter, to which I replied that I had a K&N. He laughed and said, "Yea, but it isn't installed right." He also told me I needed a trans flush even though my trans was rebuilt (by them) less than 5 months ago. I told him that and he said "oh" and moved onto 1000 other things I "should have done."
The more I think about it, the more it pisses me off that this guy thinks I'm some kind of moron and it kinda makes me wonder if I didn't know about the extended warranty, would they have said anything. I know there are a ton of LS's that go in to this dealer for service (I see them all the time when I go in) and since this is a pretty common problem, I would assume he's run into this situation before....
Sorry for the long rant but I take my car to a dealer for BETTER service. I deal with the high prices knowing I am getting the best service, but apparently they seem to think they are the only people in the world that know anything about cars and apparently they too will try to rip you off...