You didn't happen to buy this bike from Village Cyclery in Schoolcraft, did you??

Your story reads very much like my experience with this particular shop in 2001 when I purchased a mountain bike from him. He insisted that the bike he sold me was the correct size, yet there were many reasons that lead me to believe that it was too small. I finally had to get Cannondale involved directly.

Insist on a bigger frame, and if they start to give you grief about the fact that they can't sell your current ride as new, then just tell them to switch out the tires from the "new" bike. You may want to have Cannondale's phone number on you when you go in, and if you don't get satisfaction, just whip out your cell phone and call Cannondale directly while in front of the owner.