From speaking with the rep we were informed that we would have to trek back to the airport (KUL) and have it inspected, but that because we left the airport with the bag or rather we and the bag both left the airport that it was out of their hands as it was "accepted" it upon arrival. Any idea of this is true? I'll try them again either way. I've never had luck reaching anyone at CX though when trying to contact them.

I think the claim would have to be with AA/CX as the bag was left behind by them and never reached KUL to get put on AK. We found out that it ended up on a Malaysian Air flight to actually get to us.