It just came out that the 500+ uncounted King County ballots have been denied by a state judge in Pierce County.
The Republican argument hinged not on whether these were valid ballots, but whether it was too late to count them. Their previously agruements before the State Supreme Court (on a different case) cited the discovery of these ballots as a sign that the system worked and "spoiled" ballots did not need to be re-examined.
http://seattlepi.nwsource.com/local/aplocal_story.asp?category=6420&slug=WA%20Governor%20Recount
Update [2004-12-17 20:25:3 by benchcoat]: The judge's opinion was that this decision is in line with the Supreme Court case from earlier this week that ruled that new ballots would not be allowed into the recount. The WA Democratic Party will appeal on the grounds of WA State recount law allowing for admission of valid untallied ballots that were not in the original count. Apparently, our recount law foresaw the possibility that problems could arise that prevent valid votes from being tallied the day of election (like say, misplacement or computer errors with regards to pattern matching a signature).