How can I destroy data on a failed hard disk without voiding warranty?
Solution 1:
I would ask, what is the value of the data on the disk?
If it's more than the cost of a new disk, then my preference would be to destroy the faulty disk and buy a new one. You could spend a lot of time trying to get the disk working long enough that you could do a proper erase, but is it worth it? And do you know that it's definitely worked? What if there were some bad sectors that you weren't able to erase properly and still contain some data, even if damaged.
With the cost of hard drives today, if your data's valuable then buying a new disk is not a big expense.
Solution 2:
Just explain to your vendor that the disk failed but that you cannot return it due to sensitive data. Many vendors, especially vendors with business customers, will accept that without asking.
If they don't, offer a signed, written statement declaring that the disk failed. If that still doesn't satisfy them, write off the loss and consider buying the next disk from a vendor with a sensible warranty policy.
Dell e.g. even has this as an explicit option:
Dell: Keep Your Hard Drive
Solution 3:
You could ... degauss it. I mean, it's already broken ...
You just need to find a significantly large electromagnet.
Solution 4:
If the data is so sensitive, you can afford to buy another disk and scrap this one, otherwise look for a specialist in HDD data recovery and ask them what they can do about your problem, as they'll probably know how to handle your request.