401k plan has hardship withdrawals per the regulatory safe harbors.

EE presents a signed contract to purchase a house from her recently divorced ex-husband, which called for ex-husband to carry the contract for the entire purchase price. EE asked for a hardship withdrawal to make the "down payment" so she could buy the house. The request was rejected.

EE and ex-husband agree to tear up that contract and sign a new one for the same purchase price, but with a down payment and ex-husband just carrying the balance. EE submits the new contract, asking for a hardship withdrawal of the amount stated in the new contract for a down payment.

Is there a qualifying hardship?

Or, since she had an enforceable right under the first contract to acquire the house with no down payment, is the tearing up of that contract and signing of a new one a bootstrap effort that the plan administrator should reject?

As long as the second contract is valid, and I see no reason to believe it is not, I think the request is valid.

I agree. I light of the recent airline case, I would be wary of plan administrators trying to use motive, rather than the black-letter documents in order to approve or disapprove a benefit.