I agree with you that the camera is entirely usable in an aperture range I can use it for. I just want it repaired if I am going to keep it because again the money spent, this shouldn't happen (this for me, looks like different K-5's got different severities of the problem).
Sorry to hear that you got hit by the "dirty sensor" problem. It seems that this issue is very prevalent (like, over 10%), based on the number of reports I'm seeing on the Pentax forums. Fortunately, it looks like Pentax and their dealers are acknowledging the issue, and trying to make things right. Though if I were you I might wait a bit before exchanging yours, as who knows if the problem has been really resolved now.
Oh tried Pentax's own software. ugh no, horrible. I applaud them for trying to recreate the camera settings using Silky Pix's engine but really, it was dog slow and crashed on me easily.
Oh yeah, the Windows version is nothing to write home about and I hear the Mac version is just plain bad. But like you said it's the only converter that has the Pentax in-camera presets, so some folks find it useful for that reason. Also, the general consensus in Pentax land is that the supplied software and retail version of Silky Pix give the best colours (with the least amount of work) for Pentax RAW files.
Which version of the Pentax software did your K-5 come with? The latest is 4.31, so if that's not what you're running you should download the update from the Pentax website.
You sorta asked this somewhere (it might've been on dpreview), but you lose nothing by shooting DNG instead of PEF (Pentax RAW). Pentax DNG files have an embedded colour profile, so as long as your software can handle that then you are set.
By the way, since you use a Mac, have you tried RPP?