BMG abused the law by issuing a takedown request of a Romney YouTube ad
thedc.com
thedc.com
I don't believe that it is; its just the normal madness on YouTube, where they ban, delete, restrict and plaster with ads anything resembling something in their huge database of copyrighted stuff.
Where they create smoke barriers using strong words around "DMCA", but when you want to make a counter claim, there was never any claim and YouTube did this all by themselves.
"By contrast, when there is little or no risk of market substitution, whether because of the large extent of transformation of the earlier work, the new work's minimal distribution in the market, the small extent to which it borrows from an original, or other factors, taking parodic aim at an original is a less critical factor in the analysis, and looser forms of parody may be found to be fair use, as may satire with lesser justification for the borrowing than would otherwise be required."
Given that it seems fairly unlikely that there's a chance of consumers preferring this video to the original version of the song, the noncommercial use, and the length of the clip, I'd say it's got a pretty strong shot at being fair use.
1-http://www.law.cornell.edu/supct/html/92-1292.ZO.html#FN14