Assuming you haven't messed with your sysnand other than for the MSET exploit, formatting sysnand should be enough. Don't send them your SD card.
Edit: Your sysnand will be updated, so you have to get a nand mod to restore it.
And just to be sure, OP, get the nand mod done
after having sent it in to Nintendo
Man, I wonder what the Nintendo techs would think after receiving a nand modded 3DS in for repairs, lol.
Probably deny it cause it has been tampered with so warranty is gone and they'll blame any fault in it on user damage, but they'd probably be like, O.o
Also gotta make sure you have the nand backup done beforehand and stored in a safe place. I'd keep a few copies in several different places, personally. I keep mine on dropbox
