Just replace the tube. A nail hole in a tubed tire isn't a big deal. I know we used to patch our tubes on our bikes when we were kids, but I'd just replace it.
We went through 10 pages of name calling, ankle-biting, and pontifications about this in another forum. FWIW, I've run for 1,000 miles with a plug installed on a tubeless tire. I didn't die. Since the tire had 5k on it, I just ordered a replacement through e-Bay and replaced it at my leisure. Everybody thinks that if the plug fails you'll have a blowout (and I guess you might...) but usually the air just comes whooshing out the same hole that you had before you plugged it. It's not a good thing to be sure, but your tire is not going to explode if the plug fails - or the patch comes loose. In fact, since the plug usually makes the hole somewhat larger, I'd wager that it would act as a sort of relief valve if the forces of evil and darkness start working on your scoot.
My VN is "blessed" with tubes in the spoked rims. I'm also "blessed" by the fact that street sweepers are a novelty in my area. M/C tires are 200 clams a pop. Given that, I'll probably pull the tire, and install a patch and a new tube when I find my next roofing nail, sheetrock screw, etc... I've never had a patch fail, and the fact that the tube is really what keeps the air in the tire---well, this seems to be a safe enough approach---FOR ME
That's just how I roll.
If you do not feel comfortable atop a plugged, patched, slimed, or otherwise sullied tire then somebody out there will be delighted to stick a new one on for you, and you'll both sleep better that night!
Edit: Your dealer is probably just salivating over the prospect of selling and mounting a new tire and tube - or - their insurance company might not let them patch a M/C tire to keep the bed-wetting lawyers at bay. Personally I'm leaning towards the former. You thusly have only 3 options:
1. Pay the pig.
2. Try another stealer or independant shop.
3. Pull the tire yourself and fix it. I haven't tried this out myself (yet) but I'm TOLD that it's not all that difficult a thing to do.
Let us know how it comes out!!!
Like I said....JMHO!!