I thought I had read that a candidate could request a partial recount (at their expense), and that if it produced enough of a change to alter the outcome, the law required the entire state to be recounted at taxpayer expense. Either that isn't true, or this is a strange stand for Gregoire to be taking.
Gregoire is feeling the heat - from papers that endorsed her. She knows if she asks for a partial recount in selected areas, and somehow pulls out a win, she's pretty well screwed politically...
You are correct. If the final manual recount changed the outcome of the race, then the counties and districts of the state would pick up the tab -- whether they had budgeted for it or not. If the outcome did not change, then the party requesting the recount would have to pay the entire cost.