[AtlUmpSteve]

Players are not out because an umpire says so; players are out because a rule says they are out, and the umpire acknowledges that out. When it is clear that they are NOT out by rule, then the umpire must acknowledge they are not out, even if that means changing his call. You call someone out on a tag, then see the ball on the ground, they are safe, aren't they?

The umpire's statement that the batter is out doesn't change the obligation of the defense to actually get the out. In this case, not only did the defense err, but the defense attempted to deceive the umpire; even if it was unknowing, or even thinking the short hop is a legal catch. The ONE PERSON on the field that absolutely knew the ball wasn't caught in flight is the catcher, so she gets ZERO reliance on the alleged jeopardy resulting from the umpire having to change his call.

To the second point, if the runner from third had scored, then the runner from third scored. The third out was not made, the catcher was not put in jeopardy by the umpire, and nothing here made it a dead ball. The defense screwed up, and reaps the result.