Dave, I have to agree with Mooredog. Players have a responsibility to protect their own hand. It is unfortunate when things like this occur. However, I would have ruled both hands dead. I try to avoid a misdeal whenever any player has their complete starting hand. You can understand why the player that had pocket aces would be upset. He received his "proper cards" so why should they be taken from him?
There are times when situations like this can get out of hand. I remember an incident that happened while I was dealing; I called for a ruling and before the "floor" made it to the table, three or four players tossed their cards into the muck!
I question the method suggested by mooredog; if the decision would kill the offending players hand, but allow the other player to get a new second card. I would rather give the player a card from the deck stub (we used to take the third card from the bottom), this will prevent a player from announcing the cards that he had, (just in case he looked at one before it was taken).
In defense of Dave_the_Maori, I have made the wrong call many times in similar situations without incident, because none of the players liked their starting hand. We always strive for consistancy, that's what makes it tough sometimes.
