Brian - I hope they were able to get you your money back, that's just not right.
I wanted to jump in here with my question since it's the same problem with the same game...however, I *do* have a region difference: I purchased Bioshock 2 via my xboxlive account online which is registered in the U.S., but I'm currently working in Iraq and that's where I tried to have the console download the game itself. It gets to 75% and then says "Can't download Bioshock 2". No other explanation. I notice one of the mods asked if there was a region mismatch so is that a problem with this game? I was able to download and install TombRaider in the same way (purchased online with US account, downloaded to console in Iraq) with no problems.