My understanding is that slugs don't actually kill hosta, they just make them look ugly & eat the leaves they need in order to make bigger roots. I'm interested in getting a seasoned opinion on this.

Luckyladyslipper, did you try the bleach trick? If I saw creepy-crawlies, I would bleach them off, I think.

Definitely, I would tell the dealer and take photos. They will likely make it right.

luckyladyslipper,
You should wash all the soil off,down to bare root,rest the little guy in some clean water for a day or two, plant,or pot it up, and it will be just fine.
Some recomend that you use bleach in the water,as it will kill all slugs and their eggs.
dehaven does this if i remember right.
Just get all the soil off.
Next year it will be beautiful.
cAROL

I agree with all the above advice, including contacting the dealer. Nobody wants the reputation of shipping plants full of slugs. Don't put off writing - hearing about it in a couple of months seems suspicious, but immediate notification usually results in refund or a second shipment from reputable dealers... and if it doesn't, write about it here so we know who to avoid in the future!

Don't know about slugs actually harming hosta. I use plastic plates of beer for slug bait or commercial slug preps in particularly bad years.
gramma jan

Thanks to all of you. I have just sent a photo via email (I can't find instructions for how to include a photo here) to the dealer, and will go dig it up momentarily.
I appreciate your suggestions.