Thanks for the replies everyone.
Delta's CoC sure is vague in this area. Rule 240-C-2 says "you MAY be entitled to a refund", not "ARE", and doesn't clarify when 240-C-2 applies versus 240-C-1, which says that they'll transport you on their next available flight.
Delta's holding tight to 240-C-1, even when their next flight isn't until the next day.
So can the customer choose between 240-C-1 and 240-C-2, or is that Delta's choice? It seems subject to interpretation. There's no verbage in favor of the customer.
-Tom