Personally, I think both parties (Priceline and hotel) should equally share some responsibility rather than each escaping entirely. I recommended the OP try to contact someone higher up within Priceline mainly because of the treatment he received at the lower level. They shouldn't be allowed to get away without anything further.

On a side note, I'm shopping for a one-night stay in London. I'm finding weird stuff on sites like Travelocity when I enter 3 adults in one room in my search. When I make a hotel selection it says the price is for one person only, and I'm liable for additional charges for the 2nd and 3rd person. Of course they don't list what the 2nd and 3rd person charges are. Such charges would apparently be added by the hotel upon check-in. So all of this is to say I'm hesitant to book hotels outside the U.S. from a third-party supplier. To avoid hastle & confusion I'm leaning toward buying directly from the hotel itself. This is one of those cases where all a 3rd party does is allow both sides to point fingers at one another in the event a problem occurs.