They agreed that there was nothing wrong with using stock imagery. As another entrant whose design was pulled pointed out, by barring stock imagery they'd limit the accessibility of the contest to people who weren't designers. A very good point that I wish I had made!
I came to my own conclusions about this as a designer.—as someone who could produce the imagery that I used, but why? I have two jobs and am going to school. I don't have time to draw/photograph/trace yoga practitioners. Design groups frequently host contests like this and their designers are sometimes encouraged to use specific stock imagery. When they consulted with the communications department, the designers there confirmed all of this. I'm no longer defending any of my actions or theirs, just stating what my main arguments have been since the beginning.
The long and short is that even though all of our actions were above board this year, the competition has been compromised and they're just going to pull everyone's designs. An apology/explanation email will be sent to the entire getfit community, and we will all get a very nice consolation prize for our efforts. Next year the rules are going to be written so that the parameters are more clear. Whatever direction they decide to go (yes or no on the stock imagery), I'm glad the ambiguity will be removed from the rules. I think they did a very good job handling all of this, with the exception of jumping so quickly to accusations from a petty little mole rat in the first place.
The only hitch in this whole thing is that the person who originally fingered two of the designs will probably benefit from this like the rest of us, but that isn't the committee's fault. The committee will most likely have to come to the conclusion that this person was just trying to do a public service—I have a really tough time believing that Tattletale McJerkface was acting in anyone's interest but their own, and has some seriously bad karma coming their way. But maybe that's just me.