Wow, I gotta come back to the CO board more often... funny stuff!
But seriously, I agree you got a raw deal. Being downgraded from BF is irrelevant here because as the ISM stated you were compensated for that, and while you were told by the FA you would have 3 seats (a bonus), you cant realistically expect to be entitled to three seats looking at it from a compensation point of view. But still, you had the same rights as any other coach passenger and you are entitled to your 1 seat with the armrests down. If the person next to you cant fit into his/her seat then its theirs and the airlines problem, not yours. If I were in your position I think given the circumstances I would have gotten off the plane and taken another flight back. IMO its still worth the free J ticket you received (but maybe not to you).
It's been a while since I've been on the CO board since I moved to UA, but I remember some people here have email addresses and phone numbers for some supprisingly high people who actually care what you have to say. I'd suggest digging those out and trying that.
A similar (although nowhere near as bad) thing happened to me on a UA flight before FRA > IAD. I was stuck in a middle seat and the guy next to me was pretty big, and his shoulders were just too wide for the seat and I had to sit on a slant. This got painfull after a few hours so I ended up standing at the back chatting to the FA's for about 4 hours. Worked out OK for me, the one FA ended up giving me a 'tour' of the plane including letting me try out the C seats and the first suites for a few minutes. She showed me how the IFE and the FA's passenger info screen works. ^