If I understand correctly: you had tickets for PHX-DEN-MUC. When you arrived at PHX it was already apparent that the DEN-MUC flight was cancelled and would be at least three days delay for SQ to reroute you. But a different airline was still had available seats on flights that were operating DEN-MUC so you booked that instead and flew the PHX-DEN segment as per your KrisFlyer award ticket to position yourself for the other airline's DEN-MUC flight.
Yes, unfortunately by using the award ticket after you were told it couldn't reach your preferred destination you have set yourself up for some difficulty. Probably the best thing would have been to ask them to cancel the entire award ticket and waive the cancellation fee (as it was the airline that cancelled an integral component of the outbound journey) and booked the entire trip independently OR highlight the alternate flight that you were able to identify to Krisflyer agent/ground staff to reroute your existing award ticket. (You don't say what airline you took instead, but SQ can book passengers with non-Star Alliance airlines in special circumstances - I have been placed on a Qantas flight when their usual partner, Virgin Australia, made a schedule change that prevented my original connection).