Bill:
That's a great synopsis...
And there's another possibility... that C is just saying "I'll call your raise", inappropriately of course, but nonetheless that's what he's saying... no angle intended.
And that's exactly what any experienced player has to be saying... he's following the action, he's heard raise announced, and he knows it's a no-limit game. Player C has absolutely no reasonable expectation: 1) of what B's raise will be... it can be anything up to all-in, and 2) that the house will come "rescue" him if the raise is "unusually high".
Also, the TDA steadfastly to it's credit has always looked to adopt rules that don't require interpretation of intent. Rule 1 then allows any adjustment of a ruling based on "fairness" which you can take into account if you think there's no bad intent, or an "honest" or "newbie" mistake...
So I keep returning to this conclusion: If C is an experienced player, knows full well that there was a raise, and knows that raise can be up to all-in, and with all that knowledge and experience declares "call", I can't see any other reasonable ruling other than to bind him to whatever B bets. That only leaves 1) whether you extend a penalty beyond that, and 2) whether you extend some "protection" for a newbie.
Thanks again for the synopsis, it summarizes alot of what has been discussed.