Just wanted to follow up on this with an update. I wrote a polite e-mail to the GM of the hotel explaining the situation. We ended up talking about it later the next day. The thing that confuses me is she said she talked to the regional manner and got them to make an exception on the rate for me when I come back (still puzzled by this). I have checked into the hotel since then and havent had a problem.
FYI - GM's have complete responsibility for their hotel and are free to make any decisions they'd like (regardless if the hotel is MI managed or franchised)