Vijian:
I don't know if this will work but you could try it anyway.
Transfer/use any miles you have within your account and then cancel it. You're only HHonors Blue anyway so you're not really losing anything.
Once you have confirmation that your account is cancelled, set up a new HHonors Gold account through Centurion. Since it's a new account, it might work.
What do you think?
Strictly speaking though, you shouldn't have to go through this nonsense. Since your contract is with Amex, Amex are accountable for this and not Hilton.