[Xenith]

You should definitely go to a different dealership if that is what they're telling you. I graduated this Spring and got my rebate hassle-free. They made a copy of my diploma and took off the $1k from the purchase agreement.
I am not sure about what others said about having to finance through Toyota/Scion to get the rebate, but I was very straight forward in telling them I was financing outside and I still got the rebate.

EDIT: Nevermind... When I went in to finish paperwork I was told I had to finance through Toyota Financial to get the deal /sigh