DESPERATELY NEED HELP - MEXT Extension!

Hi Everyone!
I am posting this in the hope that some other students had the same problem and found a solution!
Basically I got the scholarship and came to Japan (Kyoto-u) in april 2011. I did the language training and all the stuff, applied for extension to the scholarship and did the entrance exam in feb/2012.
To everyone's surprise all the foreign students (graduate school of electronic engineering) failed the entrance exam. (Yes, really each an every one of them).
Ok, so I wrote the next entrance exam in August 2012 (a month ago) after seriously studying non stop. Big surprise! All the foreigners failed again except for japanese-born outside of japan.
Afterwards, talking to the Dean it turns out they are not that interested in non japanese students.
Here is my problem:
To receive the extension for the scholarship I need to start my master's degree studies by october this year. (I am in the natural sciences group meaning that I have to start in 18months, I cannot start after 24 months like the letters department)
In the application for extension, I followed my professors advice and only wrote the electronic engineering department.
In short according to the admin office I am unable to extend the scholarship. Even if i move departments to somewhere where they DO want foreigners, it is pointless because in the application for extension I filled in only the electronic engineering department.
I am unable to resubmit the application for extension according to the admin office.
Can anyone give any advice on how I can proceed? Is there some secret form or something that I missed that I can do?
Help e please, I came to Japan to actually study, not to f*** around for two years and not get my degree.
窶堋ｨﾅ?ﾃｨ窶堋｢窶堋ｵ窶堙懌?堋ｷﾂ！

In this day and age of poor economy, I find it amazing that any school would voluntarily reject foreign students and their money. What reason did the dean give?

His reasons were basically language related. He said foreigners have trouble fitting in and that the Japanese courses were too difficult. He said even JLPT N1 is not enough.

Honestly I dont care if they dont want foreigners, but I would have liked to know that a bit earlier so that I could have made different arrangements.

Can you apply to another university? I've never heard of anyone in similar situation so I can't comment. But that dean is weird, electrical engineering doesn't require that high level of Japanese... I only hear of such strict requirements in law or medical field, but they clearly tell you what kind of tests you need to pass. Failing all students because of such subjective thinking is nonsense - some students may be very capable of the language proficiency.

Personally I also think it is strange, but I cant do anything to change it.

Applying to another University will not help, because in the application for extension of the scholarship, kyoto univ electronic engineering is the only place listed.

If I can change the application, or amend it or cancel it and submit new one then I can apply to Osaka Univ and start in October. But the admin people told me that once that form is submitted, it is done and cannot be changed.

I think there should be a way to change/amend that submission, but I dont know how, or what forms, and the admin office says they have no idea!

If the admin people where you are can't help, try contacting Osaka University (and anywhere else you were considering as an alternative) and explaining the situation.