I;m really curious: did the OP actually see the HI Goleta as a Cat 2 on the web or anywhere else, or did a CSA but their foot in it? I can't imagine a Hilton property of any kind in Goleta going at Cat 2. Cat 5 is somewhat ludicrous, but as they say in real estate, it's all about location, location and location.

I doubt anyone at Hilton / HHonors will change the situation for the OP, particularly as it is booked solid, but it is always worth another try at some good self-advocacy.