Still a great place to come to for poker related questions even if traffic has slowed down here. In fact Wedgerock used it as a reference this Saturday evening!
I think we got both rulings wrong:
Section 8.1 says "If your first or second holecard is accidentally turned up by the dealer, then your third card will be dealt down. If both holecards are dealt up, you have a dead hand and receive your ante back." So when my first card was exposed, we correctly continued the deal with the next two cards being down. But when the second down card (third card dealt) was also exposed, my hand should have been dead and I should have gotten my ante back.
And when Terry's seventh card was dealt face up, mine should have been dealt up too. 8.17: "If the dealer turns the last card faceup to any player, the hand now high on the board using all the upcards will start the action. The following rules apply to the dealing of cards: (b) If there are only two players remaining and the first player's final downcard is dealt faceup, the second player's final downcard will also be dealt faceup, and the betting proceeds as normal."