My thought, exactly! And they should have told you up front!

In my opinion that is false advertising not to mention very dishonest. You did not get what you paid for, so should have at least been given a choice of substitute fabric.
I would be asking for a replacement fabric (of your choice) or a reasonable discount. Sorry this happened to you.

I have been quilting for 10 years and have purchased many kits made up at different LQS. Many of them have different fabric from the sample. I would always ask if it is the same as the sample in which they reply yes.
Because of this, I don't buy them anymore unless I can clearly see they are all the same as the sample.

That has happened a time or two at my LQS, but she ALWAYS lets us know BEFORE we purchase the finishing kit. You are right. Those finishing kits are not cheap! I hope they make it right with you. It is to their advantage to fix the problem or they will start losing customers for their blocks of the month. Good luck on that one.

If this happens at our LQS they tell us up front. then offer to let us pick a different fabric to finish. This did happen to last years "buck a block" BOM. The border fabric was unavailable for probably half or better of the people signed up, but they let us pick something else to use. I would not have been happy if they had just substituted something without telling me. Speak up and let them know that you would have appreciated being told up front.

YOU SHOULD HAVE BEEN GIVEN THE OPTION OF ANOTHER FABRIC OF YOUR CHOICE. I WOULD HAVE COMPLAINED TOO.

No, not unreasonable. Even if "legally" they can do it, doing so without letting the customers know just isn't a great way to do business. If they say on their advertising and packaging that "substitutions can/will/may be made", then it still would be a nice thing to do- tell the customer before they buy it! I think I would discuss what other options might be available to you, they may offer a discount, another sub, or something else. I would definetly discuss it with them.

the ideal way for them to have handled this (when they realized there would need to be a fabric substitution) would have been for them to have allowed you to Choose the substitution. Perhaps they still will?

I don't think that you are being unreasonable. I would ask to be allowed to pick a different fabric. With the economy the way it is I would thing that they would not want the negative word of mouth going around about the way they handle these blocks of the month. I was in my LQS a few weeks ago and one of the girls was making up kits and the shop didn't have the right camoflage(sp?) fleece, she called the company that was sponsoring the kits and was told to put up a big sign that said that subsistutes would or could be made with the customers approval with same price fabric. So there are LQS out there that do the right thing!!

I hope I dont go into that shop. If she doesnt change the fabrics for you or refund your money, remind her that word of mouth from customers mean much more profit or loss than the paid advertisements she does. One unpleased customer almost shut down a lqs that I know of personally.