tedster - 4:27 am on Jan 28, 2012 (gmt 0)
Sounds like you've done what you can. Clearly it's not a good user experience, but you shouldn't drive yourself crazy over this kind of injustice. The web is a big place and stuff does happen.
Google has taken some action against this kind of SERPs domination recently, but it's not clear to me if it's manual or algorithmic. I would say aim for a #1 (with sitelinks) and possibly #2 of your own. You'll be able to keep those gains long term.