What would you have done?

[NCASAUmp]

Since we're on the subject of 10-3-C, I'll toss this one out there. I was calling a game last year, and this happened to us. Here's the sitch...

ASA Men's SP. No outs, no runners on base. I'm BU. The pitcher pitches the ball for ball 1. Catcher throws it back to the pitcher, who immediately delivers the next pitch without a pause.

PU signals the DDB, then calls "illegal, no pitch." The batter swings anyway, grounding the ball past F6, who made minimal effort to go for the ball. The defense basically stopped because they had heard "no pitch" (even I heard it from B). The batter made it to 2B.

How would you correct this sitch? I'll tell you how we ruled later.