A lawyer is NOT the right next step. As soon as you engage a lawyer the school will switch from treating this as a student policy matter (which will be resolved in a timeline of days) to a legal matter (which will only be resolved in a timeline of years). The timeline question is of no concern to the courts or the school but makes a huge difference to you.
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.
Having been on both sides of the fence here, this is highly contrary to my experience. Large institutions are more than happy, in many cases, to bully anybody when it benefits them. But as soon as possible legal/media issues emerge they're going to suddenly be your best friend looking to make things right as quickly and cleanly as possible.
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.
Hard disagree. It doesn't harm to try to solve it with the help of a trusted intermediary. One doesn't lose anything but a bit of time. Instead it shows good faith. You can always escalate to the lawyer afterwards.
This is the right answer. A large institution like a university is not a monolith. The university will produce antibodies to external participants, like lawyers (or the media). You're most likely to get better outcomes if you can ensure the conflict plays out within the university and its rules, structures, and participants. Your work now is to convince other members of the university to advocate on your behalf. (It should not be difficult. If this is as you describe, reasonable faculty members will be your allies.)
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.
> You're most likely to get better outcomes if you can ensure the conflict plays out within the university and its rules, structures, and participants.
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.
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.