This is why we have rules in this game...to allay and address any disputes that may arise...and arise they will. Don't be ashamed to carry a rule book (pocket-sized, fits right in the bag). The first one you might point out to your playing competitors and your partner is this one:
1-3 Agreement to Waive Rules
Players must not agree to exclude the operation of any Rule or to waive any penalty incurred.
Penalty for Breach of Rule 1-3:
Match play — Disqualification of both sides; Stroke play — Disqualification of competitors concerned.
(Agreeing to play out of turn in stroke play — see Rule 10-2c.)
Rule 1-3.
In my opinion, witnessing a 5-foot gimme and allowing it to pass uncontested is an implicit agreement to waive the rules and merits disqualification for all involved...if you saw someone do it on another green in another group you wouldn't think that fair, would you?
The rules work to your advantage as much as they penalize you, too. The muck you mentioned could have been considered ground under repair or, as you said, you might have been offered relief from the path or it's shoulder by local rule. Don't take a competitor's word for it. Every local scramble I've ever played in had a pre-tournament gathering to go over the rules in general and to address any questions. I would have no compunction about getting a ruling, especially in a shootout where I may not get another chance.
You never mentioned how you and your partner fared in the competition...I can understand your frustration and hence the rant but, in the future, please refrain from the language infractions in your post.
Shade