You mean that when the first group played, there was no basket at all in the "correct" position? If so, the TD should be hanged.
As far as the ruling, it is covered by 801.04 (pertinent clauses
bolded):
A. It is the responsibility of the player to play the coursecorrectly. Before play begins, players shall attend the players'meeting and ask about any special conditions that may exist on thecourse, including extra holes, alternate teeing areas, alternate holeplacements, out-of-bounds areas, and mandatories.
B. Specific Types of Misplay and Penalty Procedures for Each:
Wrong Tee: Teeing off from the wrong teeing area. If the misplay is discovered after the player's throw from the incorrect teeing area, but before a subsequent throw, the player shall re-tee from the correct teeing area and treat the initial throw as a practice throw (one throw added to the player's score). If the misplay is discovered after a subsequent throw, the player shall proceed to complete the hole and receive a two-throw penalty for the misplay.
Misplayed Mandatory: Failing to attempt to navigate a mandatory route. If the misplay is discovered after a player's throw has passed beyond the mandatory on the wrong side, but before a subsequent throw has been made, the player shall be assessed a one-throw penalty and play from the drop zone as stipulated in 803.12 B. If the misplay is discovered after a player's throw has passed beyond the mandatory on the wrong side, and a subsequent throw has been made, the player shall finish the hole without playing from the drop zone, and receive a two-throw penalty for the misplay.
Wrong Target: If a player holes out on the wrong target for a given hole, he or she will continue play from a lie directly beneath that target, without penalty. If the player holes out at the wrong target, and believes the hole is completed, and proceeds to play the next hole, a two-throw penalty will be added to that player's score for misplaying the course.
Out-Of-Bounds Play: Playing an out-of-bounds disc as if it were in-bounds. If the misplay is discovered after the throw from out-of-bounds, but before a subsequent throw has been made, the player shall throw from the correct lie and treat the throw from out-of-bounds as a practice throw (one throw added to the player's score). If the misplay is discovered after a subsequent throw, the player shall proceed to complete the hole and receive a two-throw penalty for the misplay.
Non-Sequential Play: Skipping a hole or playing the holes in the wrong order. If the misplay is discovered after an initial throw has been made but before a subsequent throw has been made, the player shall re-tee from the correct teeing area and count the initial throw as a practice throw (one throw added to the player's score). If the misplay is discovered after a subsequent throw has been made, the hole being played shall be completed. Immediately thereafter, the player shall proceed to play the course in its proper order from the point where the misplay began. Regardless of the number of holes skipped, or played in the wrong order, a total of two penalty throws shall be added to the player's score for the misplay infraction. The score earned from any completed hole(s) shall stand. Any completed hole(s) shall not be replayed.
C. In instances where the misplay rules affect players within a group differently, the group shall remain together while a hole is being completed by some of the group to verify scoring and rules compliance.
D. In instances where a misplay is discovered after the pertinent hole or holes have been completed (holed out), the misplay shall not be replayed and the player shall receive a two-throw penalty for the misplay.
E. In instances where a misplay is discovered after the player has turned in his or her scorecard, the misplay shall not be replayedand the player shall receive a two-throw penalty for the misplay.
F. A player who deliberately misplays the course to gain competitive advantage has violated section 3.3 of the competition manual and shall be penalized in accordance with this section.
So, it does look like you blew the call. The players who played the "incorrect" position should have, if and only if they had teed off on the next hole, each gotten his score for that hole (from the tee to the "incorrect" basket) recorded with a two-throw penalty added, as well. If they had yet to have teed off on the next hole, each should have marked under the "incorrect" basket, continued to play to the "correct" basket, and recorded the
total number of throws taken on the hole (i.e., the number taken to play from the tee to the "incorrect" basket plus the number taken to play from under the "incorrect" basket to the "correct" basket), with no additional penalty. But the TD should still be strung up (or at least pilloried), either way, if there was just a sleeve at the "correct" basket location.