I work in MRI - around a magnet (1.5T). I love techy watches since I can't wear watches with hands, I'm always looking for unique watches. I haven't had problems with digital watches, but I would not advise anyone that works around a magnet to use this watch near it.
I think you may be right about the MRI actually. My dad used to service hospital equipment for GE Medical Systems - mostly nuclear gamma cameras, sometimes xray and occasional MRI's. He told me a number of stories about the MRI - how they had to ban metal pens etc becasue they were getting ripped free of peoples pockets. He said the worst one was a janitor that was mopping the magnet room while it was energized. His normal plastic rolling mop bucket had sprung a leak so he used a heavy steel pail in the room. As soon as he got it close enough to the magnet, it sucked it in side the bore. They had to build a winch and scaffold system to pull it out. It took hours.
Bottom line being that an MRI is a ultra powerful superconducting magnet, there is a huge amount of Gauss they generate. I'm not sure it's enough to demagantize the perm magnet in a vibrating motor but perhaps it ripped free the connecting wires that run to the motor? Take a look at the below picture, from the teardown here: http://www.ifixit.com/Teardown/Pebble+Teardown/13319
Since leads going to the motor aren't glued in place, and are "free floating" it seems to me, that, if you repeatedly exposed the watch to a moving extremely powerful magnet field that perhaps it could get the wires to "twitch" inside the watch. And that repeated twitching could eventually break the solder joint.
Also, you'll notice that this isn't a "typical" old school vibrating motor like you'd see in older cellphones (The kind that would power those Zip Zap RC cars). It's one of the newer style "pancake" motors that's much thinner, to allow it to be used in tiny devices like this. This has more in common with the motor in a ceiling fan. Given how thin i tis, I'm wondering again, if the force of the magnet could cause increased friction inside the tight tolerances motor, eventually seizing it. This would go nicely in line with the fact that you mentioned, that the vibration was getting weaker before it stopped.
Either way, I don't' think you can use your Pebble near the MRI. :( Perhaps I could recommend, once you get it RMA'd and replaced, that, you change your watch band out for one that is quickly removed. Perhaps a hoop and pin style, or a velcro one, etc, so that you can take it off in the magnet room?