I agree with the comments above, they all seem to attack the issue from a slightly different angle. IF this were my problem, I would likely go this route:
1. Write all your Congressional types a letter stating your issue and position. Make it short, sweet, and to the point, but include pertainent information (conversation with ACoE, denied permit, lack of response in requesting reason for denial.) As hard as it may be, try to keep emotion out of it and resist the urge to badmouth the Corps. You can do that in follow up letters if the nice approach doesn't work. E-mails as well as snail-mail letters can work.
2. A certified letter to the Corps requesting review and reason for denial.
3. A stronger letter to the Congressial types requesting an inquiry. As a former Active Army officer (not in the ACoE) and a current Reservist, WE had to definately pay attention to those. I'm not so sure about the Corps.
Hope this helps, keep us informed!