The same goes for publicizing this further. The student newspaper is probably okay, but keep talking to other media in the room as a bargaining chip. Bad press may well force some administrator's hand.
To be sure, a chat with a lawyer may be helpful to get a sense of the universe of possible outcomes pursuing extramural action, but don't let anbyody send any lawyerly letters yet.
It's too late for that, even if you're correct here (and I don't think I agree). News of this has already spread, and will continue to spread.
The ombudsman is definitely not a bad idea, but in most cases the mere hint of legal involvement would get this resolved without any legal involvement - just going on for a consultation doesn't mean one has to go to the next step, and in all probability you won't have to.
Instead of taking your advice on the matter, maybe see what the lawyer has to say.
It does seem like you need someone on your side. A list of people to consider: your academic advisor, the professor in whose course you built the prototype application, your department chair, student ombudsman, dean of students. If the university is being as unreasonable as your posting makes it sound like, you will have no trouble getting one or more of these people on your side and they will be able to apply pressure to the registrars office on your behalf if needed to get your hold lifted.