Dropped 3rd strike question

[Nigel Tufnel]

Originally Posted by FTVMartin

This came up in a meeting last week. FED.

R2, 2 outs 2 strikes. R2 breaks for third. Pitch is in the dirt and swung at and missed by Batter. Batter takes off for first and catcher throws to third to retire R2 for the third out. Who leads off the next inning?

I say the batter never completed his at bat by being put out. Everyone else says I'm wrong. Any rule reference would be helpful. I'm using 7-1-2 to make my point.

If a batter walks, he still is not put out....but yet he completed his at bat...