Hi Jay
I think the IQ of the present 300 f/2.8 is superb, not only with a 2x TC but with stacked 1.4+2x TCs. It is for this reason that I feel comfortable taking it to Africa on my next trip instead of the 500 f/4.
Crop factor is not a factor in telephoto reach for subjects that do not fill the frame.
So the relevant metrics are:
300 + 2x on 7D = 600 mm.
500 + 1.4x on a 7D = 700mm (you can't AF with 7D with the 2x).
So with a 7D, there is not much penalty.
More details at:
http://www.clarkvision.com/articles/telephoto_reach/
I will report when I return and have a change to go through the images.
I never buy extended warranties, and have saved a lot of money over the years to more than pay for a repair.
Regarding the 70-200 f/2.8 II with a 2x TC, the clear aperture is only 71.4 mm, which gives a diffraction limit of 1.6 arc-seconds. On the 7D the pixel spacing at 400 mm is 2.2 arc-seconds, which is pretty close (40%) to the diffraction limit. Thus the finest detail will be reduced in contrast. In comparison, the 300 f/2.8 has an aperture of 107 mm and a diffraction limit of only 1.08 arc-seconds. The 300 f/2.8 with a 1.4x TC should give better contrast in the fine details, as we would expect, being a much larger more expensive lens.
Roger