Jon: I totally agree with your take on things. Priceline fulfilled its obligation. The front desk blew it.
I had a bad stay at a Hyatt recently (problems with the heating system), and they offered to put enough Gold Passport points in my account for a free weekend. I thought that was very fair compensation.
If I were in your shoes, I'd write to corporate as others have suggested.
I try to put language in my complaint letters that doesn't threaten to withdraw business but asks for fair compensation. I also try to tell them what I liked about the hotel stay or flight, especially if I can identify one person who helped resolve the problem or did their best under difficult circumstances. With Hyatt, I stated:
Given the problem, I feel that some level of compensation, such as vouchers, cash reimbursement, or Gold Passport points is in order in this case.
I have written a number of letters with language like this in them over the years and I've hardly ever been disappointed with the level of compensation I've received.