license woes

Hi,

I wonder if I can borrow your wisdom here. I tried to convert a foreign
private pilot license to a US one, and hit a wall.

On 9/5, I applied for a conversion of Japanese glider license to a
US one at San Jose FSDO. On the application form, I disclosed that
I had a US ASEL license, and even verbally pointed it out when asked.
Then, they did issue me a US glider license. I brought it back home
happily, joined a flight club and did BFR on 9/9, and flew every
weekend since then.
However, on 9/25, they sent me a letter saying that they issued me
the license by mistake. According to them, they shouldn't have issued
the license because I have a US private pilot ASEL license
(14 CFR 61.75(b)(3)).

Not only I cannot fly, I had to leave the club because it required at
least private pilot license to be a member of.

Here is the law.

§ 61.75 Private pilot certificate issued on the basis of a foreign
pilot license.
(b) Certificate issued. A U.S. private pilot certificate that is
issued under this section shall specify the person's foreign license
number and country of issuance. A person who holds a current
foreign pilot license issued by a contracting State to the Convention

on International Civil Aviation may be issued a private pilot
certificate based on the foreign pilot license without any further
showing of proficiency, provided the applicant:
(3) Does not currently hold a U.S. pilot certificate;

Here are the licenses I have, and year I obtained them.

1989 Private Pilot glider (Japan)
1992 Private Pilot ASEL (US)
1992 CFI rating on glider (Japan)
1992 Private Pilot ASEL (Japan)

To summarize the discussion with FAA officers, I have a few options.

1) Surrender the US ASEL license, and FAA will immediately
issue me a US glider private license because 61.75(b)(3) no longer
applies. This idea was actually suggested by multiple FAA officers,

so I'm sure this works. Not too attractive, though.

2) Invent a time machine, go back to 8/13/1992 12:00am, drive up to
a small motel near Jefferson County airport in Colorado, and slip in
the following note under the door of the room I was staying.

Dear Gen,

Apply for the conversion of your Japanese glider license before
you take ASEL checkride tomorrow. It's free, and there is no
chance it is denied. This will save you a lot of hassle in your
future.

Truly yours,

Then, I will have both US glider license (based on Japanese one)
and US ASEL license now. FAA will not revoke the glider license
even after I obtain US ASEL. The order of application makes
difference.
I wish I applied, but I never thought having a US license becomes
disadvantage..

3) Take a checkride, and add glider rating on my existing US private
pilot license. Though this is the cleanest option, this is the most
expensive option. It costs more than $1000 (exam fee, aircraft
rental, tow fee, etc.) on top of $500 I already spent on BFR of the
mistakenly issued license. I wish they didn't issue me the license
in the first place.

So, my questions a

- Does anyone know the background 14 CFR 61.75(b)(3) was
established for? (I asked FAA officers, but nobody knew.)
- What is the appropriate process to appeal for an exception?
- Any other idea to get a glider license issued?

Thanks,
-Gen