Now on HF --> as someone in the HF world right now, unlike PE shops, HFs DO NOT care whether you have an MBA or not. It's true that Harvard attract most HF recruiters than any other school but HF recruiting is self initiated anyways wherever you go. Harvard won't get you HF job guaranteed.....My friend at HBS just told me that there are about good 30 2nd yrs currently looking for HF job (they will be graduating in about a month - sad). HF recruiting is all about your own networking and etc.. Big catch here: AGAIN, I would say about 90% of HFs DO NOT care about MBAs. So if your goal is to get into a HF thru an MBA (200K of cost, foregone comp, and 2 yrs of time), it doesn't make sense as HFs DO NOT care whether someone has an MBA. PE does care but not HF. They don't give a crap about MBA. However, if you need 2 yrs time to look for a HF job, then maybe MBA might be worth it. HF is not like PE, you don't need an MBA to get a HF job. Even if you get into a HF, your compensation as a post MBA dude/gal will be exactly the same as a guy/gal who came in w/o an MBA. Period.
I also work in the HF space and in my experience this is absolutely correct. Very few of our PMs/analysts have MBAs at all, and those that do have them come from a variety of top 10 to (gasp!) top 15 schools - not just HSW.
Most hedge funds are staffed on the lean side, so they don't really have the manpower to bring in people with potential but no experience (either i-banking or previous buy side work) and train them up. You need to be able to demonstrate that you can hit the ground running, and an MBA alone just doesn't make up for lack of experience (I'm not sure if OP stated what field he worked in before, but if it wasn't a technical finance position this could be a problem later on)
I know you said hedge fund preferred, but if you're willing to go the mututal fund route (which isn't as sexy, but actually has a lot going for it), you will get the top shops recruiting on campus. Looking through a few of the big guys' websites, I see this
Capital Group: HSW+Booth and Columbia
Pimco (from older file, so may have changed): Wharton, Booth, Columbia, Stern (no H or S for portfolio management)
Wellington (info sessions listed on website): Booth, Sloan, Wharton
You get the picture - Booth is fine. And it kills me to tell you that because I'm on the waitlist
As for the whole transformational experience business, I tend to agree with my boss (himself an HBS grad). Harvard sells its students on the whole transformational experience thing so they're more likely to believe their later success is a result of their HBS education (rather than their innate abilities) and they are then more likely to donate money to the school and hire future HBS grads. As an aside, he thinks HBS and Stanford are complete jokes of schools and would rather hire Booth/Wharton if forced to hire MBAs