Airline dropped our booked flight - What are our options?

After reading south jersey gyals post about A.J out of Philly I called to check on our flight. Sure enough that route was dropped. It was a one way from MBJ to PHL.
We booked USAir from PHL to MBJ because A.J. did not offer a Wednesday route and that was when we wanted to go. We booked the A.J. to PHl for the return
The A.J. rep offered to book us on a return to N.Y. but since our car will be parked in Philly that won't work. He then tried to book us on USAir for our return but USAir declined the request.
I asked him what options we had. He said -

1) Fly A.J. into N.Y.
2) Take a full refund.
3) Wait and try later to see if they can book us on one of the USAir flights

I checked USAir flights out of MBJ and they have seats open but the price is just under $100.00 each more than our A.J. tickets cost.
I suspect that may be why USAir is declining A.J.s request.

Does A.J. have a responsibility to assure us airfare on another airline? Or could they simply say your flight is cancelled here's your money?

I am debating on how to procede. Take the refund and book my own return flight so I know I am set or wait it out and see what happens.
As you can see from my ticker I have some time to wait but I am good not at that. I like to have things planned, set, and secure.

Any ideas and suggestions?

Now you got me nervous.. Us air hasn't confirmed my first portion of the flight to fort lauderdale yet. then i would fly air j to mobay from there..

Since booking through US Air on the flight you want is $100 more than what you have already paid, I would call back to AJ again and request that they put you on it. Air J has to to decide whether or not to pay US Air their prevailing rate, and it is the supervisor on duty's call. Perhaps you will get a different supervisor who will take it. If not, I'd tell them you're going to think about your options and simply hang up. Try again a few days later and keep trying until you get the answer you want. Worst case scenario is you have to end up taking the refund and book your own flight, but persistence should eventually pay off.

I just called back they told me that us air wouldnt do it because I was using my frequent flyer miles.. so, I have no tickets for july and hotel reservations for sandy haven.. I am sooo mad...

That too bad jersey gyal. I have done some web surfing to see if there were any regulations covering my situation for cancelled routes. The best I could come up with is the the airlines do not have to set us up with airfare on a different carrier. They usually do it for customer relations.
I am going to call them again in a week or two. I have a feeling with the difference between what I paid for the A.J. and what USAir's rate it won't happen.

Good Luck with yours

ok new scenario.. I am going to use my ffm for fort lauderdale round trip to mobay and back.. just have to pay for a ticket to fort lauderdale. so now i wait for air j to see if they approve.... now if this don't work.. this trip just wasnt meant to be.. cause its been hell..