<<Look at put prices going out to 2013 at the 30 level, over $9. Someone must think this is going down or they would not be offering that much. >>
Put prices have to factor in the dividends expected over the time period, which in this case would be 7 dividends at $1.40, or $9.80. Take those away, and you're basically paying nothing (or a negative amount) for the puts.