Welcome to FT beanstalk!
The BEST thing to do is to contact the GENERAL MANAGER at the property while you are still there. Then send an email to starwood (see the sticky thread that shows the contact information) outlining the person who told you the new policy, etc. Finally, explain to the GM BEFORE YOU LEAVE why you're cancelling your future reservation. I am sure that he/she will try and make sure that you are reasonably satisfied.
I hope your next post is a better outcome.