fubar on dropped third strike

[chartrusepengui]

runners on 1st and 2nd with 2 out and a 3-2 count on batter. On pitch runners take off and F2 drops called strike 3 and batter tears off for first. I am BU and position myself for the play at first. F2 throws ball over head of F3 and R1 and R2 keep advancing. BR stays on bag at first while F3 makes throw to plate - but no play there. Time is called.

Coach comes out and appeals runners advancing says UIC called BR out saying he couldn't advance as 1st base was occupied. - visiting HC is out saying it was a dropped 3rd strike and legal. UIC calls me in and asked what I had. I told him that observed that BR was safe at 1st and R2 scored and R1 safe at third. He gets deer in headlight look and tells me that he said "strike three - batters out". Don't ask my why - he knows better - has more experience than me. He says he wants to change call and correct mistake.

I may very well be wrong - but we put BR on first as he reached 1st safely regardless of what UIC said. R2 was placed at 3rd adn R1 was placed at second. We advanced them 1 base from time of pitch as some players "stopped playing" when UIC called BR out -0 which would have been 3rd out of inning.

How could I have done better from BU position. I know that UIC should only have called strike three without saying anything else.

What say you?