Here are a couple of thoughts for you, though they are technical and perhaps not what you're interested in if "nobody really cared."
First, in the Appendix I section of the Rules, there is a suggested local rule for "lift, clean and place." The Ruling Bodies suggest that you adopt their wording for local rules, though it's possible that alternate wording would be equally acceptable. But I don't believe that your alternate wording, which allows one to place in "any direction" would pass muster -- given it allows you to place closer to the hole. So, as a start, I don't believe your local rule is "legal." That being the case, everyone is wrong all day -- not just you in this particular situation.
c. “Preferred Lies” and “Winter Rules”
Ground under repair is provided for in Rule 25
and occasional local abnormal conditions that might interfere with fair play and are not widespread should be defined as ground under repair
However, adverse conditions, such as heavy snows, spring thaws, prolonged rains or extreme heat can make fairways unsatisfactory and sometimes prevent use of heavy mowing equipment. When such conditions are so general throughout a course
that the Committee
believes “preferred lies” or “winter rules” would promote fair play or help protect the course
, the following Local Rule is recommended:
“A ball lying on a closely mown area through the green (or specify a more restricted area, e.g., at the 6th hole) may be lifted, without penalty, and cleaned. Before lifting the ball, the player must mark its position. Having lifted the ball, he must place it on a spot within (specify area, e.g., six inches, one club-length, etc.) of and not nearer the hole than where it originally lay, that is not in a hazard and not on a putting green.
A player may place his ball only once, and it is in play when it has been placed (Rule 20-4
). If the ball fails to come to rest on the spot on which it is placed, Rule 20-3d
applies. If the ball when placed comes to rest on the spot on which it is placed and it subsequently moves, there is no penalty and the ball must be played as it lies, unless the provisions of any other Rule apply.
If the player fails to mark the position of the ball before lifting it or moves the ball in any other manner, such as rolling it with a club, he incurs a penalty of one stroke.
“Closely mown area” means any area of the course, including paths through the rough, cut to fairway height or less.
*PENALTY FOR BREACH OF LOCAL RULE:
– Loss of hole; Stroke play
– Two strokes.
*If a player incurs the general penalty for a breach of this Local Rule, no additional penalty under the Local Rule is applied.”
Now let me move on. Your ball was in a hole which was clearly not a water hazard, and which clearly showed water under/around the ball. This, even if it wasn't in the fairway, would have allowed you Abnormal Ground Condition free relief within one club length of the NPR, even without the lift/clean/place local rule. So any claimed violation of having moved your ball more than a grip (vertically) would be moot. However, since we're being technical here, getting this free relief would have required you to drop, not place, so you violated that particular rule, and any success for you would have required that you took relief from the LCP local rule.
Which gets me to my final point, and perhaps more directly to your question, which is does verticle distance count? I don't find any decisions in relationship to your specific l/c/p situation, but a closely related ones seems to me to suggest that your accuser was right, that you could not ignore the verticle distance if your ball was on the ground. You'll have to read far in to this decison to see what I mean:
Ball Lying on Elevated Part of Immovable Obstruction
A ball comes to rest on the elevated part of an immovable obstruction, such as the walkway of a bridge over a deep hollow. What is the ruling?
If the player elects to take relief, vertical distance is disregarded. The nearest point of relief (Point X) is deemed to be at the point on the ground directly beneath where the ball lies on the obstruction, provided the player would not have interference, as defined in Rule 24-2a
, at this point. The player may proceed under Rule 24-2b
by dropping the ball within one club-length of Point X.
In a situation where there would be interference with some part of the obstruction (e.g., a supporting column) for a ball positioned at Point X, the ball is deemed to lie at Point X. The player may proceed under Rule 24-2b
by determining the nearest point of relief for a ball lying at Point X.
The procedure is different where a ball lies underground
(e.g., in a tunnel). In such a case, all distance, whether vertical or horizontal, is taken into account when determining the nearest point of relief. In some cases, the nearest point of relief would be near the entrance to the tunnel, and in other cases it would be above the tunnel and would need to be estimated.