While there is some limited precedent for reversing a call of time, the given situation doesn't qualify, because the argument could (and surely would) be made that the pitcher let up upon hearing "time" called, and served up a meatball which is why the batter was able to jack it out.
So, you're stuck with Door # 2, which as you suggest would almost surely result in an ejection or 10. It would be a nightmare of a mistake to make, and depending on the league/level of play, could also be a career ending or career limiting mistake.
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