Sorry, but you are correct: This has already been beaten to death, over on the main Sea Dragon thread:-http://forum.nasaspaceflight.com/index.php?topic=9733.0Ross.
From the Space Operations budget (2nd paragraph): "Though the fleet of Space Shuttle orbiters will be retired once their role in ISS assembly is complete in 2010, portions of the Space Shuttle's legacy (including manufacturing facilities, ground operations equipment, launch pads, flight hardware, workforce skills, and experience) will be the foundation for the exploration vehicles being developed by the NASA Exploration Systems Mission Directorate (ESMD). This budget provides for careful planning, optimized utilization, and responsive disposition of processes, personnel, resources, and real and personal property, focused upon leveraging legacy assets for Exploration programs' safety and mission success." Doesn't this seem to preserve the use of those resources in a way where a HLV could meet Exploration needs?