Well your story is very close to setting me on a rampage. Luckily I am tired today so it's limited to evil revenge thoughts running around inside my skull. I would say on of the easiest and most productive steps you can take is to inform your local media of the situation. Local papers covering your city, area and county. Grassroots types of local magazines and groups. "Bigger" media outlets usually pick up on those stories and they can spread like wildfire from there.
You could also try calling them and instead of asking for the editor, ask for the names of the manager, board of directors, staff list, etc. Make sure this particular editor is not keeping the situation under wraps. It could also be fun to have different friends call and ask if they have a press release or statement about the copyright infringement case >:) hehehe
I noticed under their Contact Us page there is a list of sources for their monthly publication including addresses. It should be easy to get phone numbers for those establishments also. I would give them all a ring and let them know what this 'free' publication is up to. I think the Whole Foods in particular may be up to taking their publication out of their store :)
I find it also interesting how much emphasis that editor put on their being a free publication and helping young writers for free yadda yadda, yet on their website they are also marketing themselves as "an effective and affordable way to marker your business" They very liekly have the income to pay your very modest compensation. On that note, try to find out if they are a licensed business for what they're doing and complain to chambers of commerce and BBB. Of course if they are operating a business wihtout a business license....mwuahahahahaha >:D
Oh, here is the website of the town they are based in: http://www.townofsunderland.us/index.htm
Town Clerk: http://www.townofsunderland.us/Town%20Clerk%20Home.htm
and Town Administrator: http://www.townofsunderland.us/Selectmen.htm
and the county: http://www.frcog.org/
I am sure those can offer some fun. I would particularly inquire to make sure they have a business license for they are running a business by charging advertising fees....
Oh my, ok I am done with evil scheming for the moment, GOOD LUCK!!!