[HELP] Washington denied application. STOLE documentation

:'( Please help, my gf and I are devastated right now.

I'm working/living in London UK and my girlfriend applied for her British passport in November 2010 so she could come live with me.
She is Canadian born (1988) with a British born father and grandparents. So in theory she should meet the requirements for Citizenship by descent.

In December 2010 her application was returned to her denying her application stating she was missing:
1) her full certified birth certificate
2) her fathers full certified birth certificate
3) 2 other official forms of ID

She immediately applied for both long form certified birth certificates and received both in the mail within two weeks.

She then returned to application to Washington with both the birth certificates they had asked for as well as two more forms of ID; her Student Card and her drivers license a long with some official bank statements just to be safe.

She got back her application TODAY. February the 4th 2011.

Her application for her British passport was DENIED stating she was missing her fathers long form birth certificate and an extra form of ID.

The application was returned to her with everything she sent BUT not the two items stated above. They were gone.

We are devastated and don't understand what on earth has happened.
We believe they took the necessary documentation out of the application and out right refused her for no reason what-so-ever.

According to every source I have read she has met the necessary requirements for the British passport by descent.

To us it looks like they STOLE her documents just to deny her. She now has no Student Card and her fathers long form certified birth certificate is gone.

What has happened? What is going on?
Every phone number here:
ukinusa.fco.gov.uk/en/help-for-british-nationals/passports-old/contact-us has been useless.
Not one anywhere on that website gets you through to a human in Washington. Some get you through to the British Embassy in the UK which is no help at all because the application has nothing to do with them, it's all Washington based.
All they suggest is to email the Washington office which we have as well as faxed them.

What can we do at this point?
Is there anyone we can contact?

Please guys, any advice will be helpful. This application cost around $300CAD and we feel like it is a totally unfair robbery to lose that to documentation they claim we didn't send which we clearly sent.

did you call the embassy directly?
(1)(202) 588 6500

Yes, the number is a recorded message which directs you to the website.