Followed a link from a friend's LJ. I'm appalled, both at the conduct of the magazine and at the frankly rude (and legally incorrect) response you got from them.
I'm sure other commenters here have already covered this (considering we're on page 6 of comments, lol), but I'll just add the following (with the disclaimer that this is not to be construed as legal advice, and that the only advice I can give is that you should seek legal counsel):
a. If you have not already done so, register your copyright for the article. All ideas fixed in tangible form (including on the internet) are entitled to copyright protection. This is a pro forma process, costs next to nothing, and you probably won't require the assistance of an attorney just to register your rights.
b. File a DMCA claims. You have rights, and the law gives you an opportunity to enforce those rights.
c. Talk to an IP attorney. Yes, there is a cost involved, but many would be willing to take this case pro bono, I suspect. Slam dunk, really. (If you don't have access to legal counsel, consider the law clinic route. Or PM me, if you like).
d. Keep scrupulous records of everything (which it appears you're already doing).
Good luck. And spread the story far and wide. This sort of thing has to be STOPPED.