At the shop I used to work at, we would sit down with the customer and explain and show exactly why we were failing the tank. In the three years I worked there, we never had anyone object to having their tanks taken out of service. Don't get me wrong, none were happy, but they understood why we were taking their cylinder out of service. As for hydros, be careful. I recently had a bad experience with a hydro facility with two PST HP 100's. I had not been aware (neither had they) about the "rounding out" procedure required to get an accurate test on tanks with PST's hot dip galvanized coating. It was on this board that I found out about the technical bullitins on PST's website. Basically, the facility failed my tanks but I argued, and did my homework. I even called and talked to an engineer at PST. Even he said that he could not guess how many good PST cylinders had been taken out of service from "failing" hydros. It pays to do your homework!
I guess the moral to my story is to ask questions. A VIP tech. should be more than happy to drop a light in a tank to show you exactly why he is failing it. They should clearly explain, "these are the standards, this is why this tank does not meet these standards". With a hydro, most places will do more than one test if it fails. If you still are not convinced, take it somewhere else for a second opinion. You also need to consider the history of the tank in question. In regard to my tanks above, I had "babied" them since I had bought them. No overfills, and they had not been used much in the past few years. That was why I had such a hard time believing that they failed.
Anyway, just my $.02