I used to live in that part of the country. That preschool mess was on the local news for years as that mess dragged along. The happy ending is Universal and Hannah Barbara was more than happy to show up and repaint it for them (and to suck up good publicity). Sadly, I can't find pictures because the mural of the Scooby Gang (not the Buffy version) was fantastic.

More info if anybody cares:
http://www.snopes.com/disney/wdco/daycare.asp