I'll probably get some flack for saying this, but I'm going to let the coach have his conference, and I'm going to change the down, but only for one down. I do not view this as perpetuating the mistake from down to down. The error was not made in placing the ball, the error was made in playing the next down *as 2nd down,* and was not really an error until the down was actually played. Therefore, I would permit a challenge that the down just played should have been third down because of the loss-of-down provision.
But I would go no further. I would not allow a challenge any later than that 2nd/3rd down play, i.e. I would not let them play third down and then challenge that it should have been fourth down because of the mistake made on second down.
That's my opinion.
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