Just to close this thread:

I contacted PriorityClub, and they reminded the hotel.

A lovely manager at the Venetian called me, apologized for the issue, and a refund was processed a couple of days later.

They are aware of a number of integration issues between the IHG and Venetian systems - in this case I was told that my cancellation wasn't transferred to the hotel, so they processed the no-show amount.

I have taken two lessons from this experience:

1) Don't just accept the default credit card settings when making reservations - even if I think there's no chance of a charge being made, things can be missed.

2) For any non-standard reservation cancellation, I will call the hotel instead to cancel. More work, for sure, but worth the peace-of-mind.