Heathriel,
You are encountering a BIG difference between gold and diamond levels. There are capacity controls on the award rooms. Once these rooms are gone, they are gone. However, a diamond may be able to do a diamond force to obtain an award room. This does not mean that there is additional award capacity being hidden away from a gold member. A revenue room is being converted to an award one for the diamond.

You are able to get a paid reservation which means that the hotel is not sold out, just the award capacity is filled. A diamond can get around that.

A diamond force can only be done for the named diamond member. The points come out of the member's account immediately. You cannot transfer points from your account to that diamond member's.

You should check to see whose mistake this was. If Hilton's, you should hopefully have proof of the original award reservation or at the very least, the name of the agent who helped you since you had to do this by phone. This will help you rectify the situation. If it was your mistake, then looks like you may be out of luck.