Contract disputes- help needed ASAP!

Background: I contacted a large local Memorial Day Weekend event last year, the week after the event, asking about being a vendor next year. I was only hiring painters, not painting myself at this point, so I asked about henna and some other stuff. I have an email from 7/6 about this. I was asked to call back after the first of the year, as panning would happen then. I did. I asked for an exclusive for henna, and was told there was one other artist, and I'd be the only person with painters. Ok, cool. I sent a check, which was cashed in March, and I have lots of emails saying I can do all my arts.
Today: Three days before the event, I get an email saying that he'd contacted the other artist first and given her the exclusive for henna, and that I had asked for painting space and only mentioned henna afterwards. So he wants to ban me from henna, and offers me a small refund of my booth fee. What do I do?
Unless he called her before the event, I was asking first. No way I would ask about things that, at the time, I didn't do myself, and not mention the thing I DID do. Unfortunately, that was all by phone, so I have no record other than memory. I do have that contract though, and several emails confirming everything in writing, and the check was cashed months ago.
I don't want to burn bridges. I want to be back at this event in the future as a yearly thing. But I hired several painters and henna folk who gave up other lucrative jobs to be at my event, not to mention the money I would make myself doing henna. I don't know if there are other events I can find this late in the game on a holiday weekend. So I want to be nice, but I also need to make up that several thousand dollars. What would you all do?

Personally, I would try to play nice, since you don't really have a legal leg to stand on. (They already told you they had an artist at the onset.)

I would take the refund. You could try sweetly explaining the situation to the organizers as a misunderstanding & see if you could get a more lucrative refund.

Explain it to the henna artists, you could ask them if they'd do glitter tattoos instead if they don't get a booking? (Or maybe airbrush tattoos?)

Generally large events stick with what has worked in the past...Play really nice & they will be happier to have you next year.

These things happen. It's how we all learn...

I have several emails, and my contract, which say I can do henna, paint, and glitter.

But "saying you can" & actually agreeing together that you will seems a bit nebulous from your post:

"I was asked to call back after the first of the year, as panning would happen then. I did. I asked for an exclusive for henna, and was told there was one other artist, and I'd be the only person with painters."

Frustrating, but seems at this point the question is how can you recoup & come back next year too?