You're not out the $119, just the $9.95 for the domain registration. Anybody who offers a grace period loses money each time they let someone correct the problem, as they pay ICANN for the registration. Who are these registrars with this grace period?
You don't have a leg to stand on regarding canceling payment. They provided exactly what you requested. Just register the correctly spelled domain (here, or some other registrar) and use your Hosting account here to host that domain.