Questions:
How many rooms did you have reserved?
How did you receive the "message" that your reservations were cancelled? I'm assuming e-mail/voice mail since you didn't have the opportunity to respond immediately?
It doesn't seem like guarantee would work in this case since you have been notified that you no longer have a reservation.
I tried to look up availability for Baton Rouge in that time frame, and even logged in as a Platinum I only got one (Baton Rouge Marriott) as available for the holiday weekend... However the standard rate was $159 - seems like this would be less than the "$113 more" than you were quoted (unless you had a really good deal at the other location).
Another interesting note is there is also an LSU football game that weekend. I think I would be less "understanding" of the cancellation if it were football-related rather than hurricane-related, but I'm not sure how you could know.
Sorry for your troubles.
Please let us know the outcome of this situation...