Try to take a look at this from the Consular officer's viewpoint. If I understood what you've written:
You said you are not residing in India but also said you obtained and submitted the police clearance certificate -- which is the documment required for Indian nationals living in India.
You seem to believe they don't understand that you have resided for more than 30 years in the US even though you showed ample evidence of that. The issue is just the opposite -- they have accepted that and are now waiting for you to follow the proper procedure for obtaining the police certificate for an Indian national residing outside India.
You now sort-of acknowledge the docunent you should have submitted was one you could/should have gotten from the Indian Embassy/Consulate in the US, but didn't know that -- which is not the US Consulate's fault and something your lawyer certainly should have told you. But, because you didn't know it was required, they should make an exception for something that clearly says "Exceptions: None". You also still appear to be placing blame back on the reciprocity instructions because they don't specifically say you needed it from the Indian mission in the US -- which it couldn't, as these instructions are for any Indian national resident anywhere but India -- it clearly states the "local" Indian Embassy, which in your case would of course be the US.
You incorrectly assume the certificate provided through the Indian Embassy in the US would only be run against US police records and, therefore, duplicates USCIS when the certificate is primarily an attestation that you had no known criminal record in India.
You had your lawyer submit an "explanation of their own guidelines" -- his interpretation, that is -- in essence telling them they don't know what they're doing and should accept his interpretation without question rather than review it against the requirements themselves or with State Department lawyers.
You are "mind-boggled" that they wouldn't automatically declare a required document "unobtainable" when it clearly WAS obtainable, but you didn't follow the procedures to obtain it and are now placed in a difficult position.
And, you don't want to think it should cause significant delays -- it's already been more than a week! -- in your case while they review the idea of making an exception for a non-exceptionable issue?
This all might take some time to resolve.