I was a warehouse manager for a tile company with only 2 warehouse employees. I was injured in february of 08 and had shoulder surgury in may. It is now 7 month from my surgery and I attained a full medical release from my doctor and the next day I was fired. the company stated the poor state of the economy as the reason also stating they had gotten rid of my position in June and I was never notified. the way I see I had senority over the other employee and If I had not been out of work due to my injury I would currently have a job. Is this legal????

Yes, it's legal. Even if you were covered under FMLA, you only get 12 weeks of job protected leave.