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I had the same thing happen in 2005. Bought a good domain from GoDaddy, set the dns for my hosting, and put a blog up on it, then I got an email a day later that my purchase was cancelled.
I contacted them, and they told me that at the same time I purchased the domain, a guy in Israel purchased it, and they claimed that he bought it a few seconds sooner than my transaction.
I tried to fight it, but they insisted nothing could be done.
They credited my account for the domain, and that was it.
Good luck, but I think you are probably in the same situation.
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