OFFSIDE VS. PENALTY KICK: COMMUNICATIONS, COMMUNICATION, COMMUNICATION!!

Question:
I was recently on a game where the attacker was offside and actively involved in play. I put my flag up to indicate offside, but the referee did not see me. During the pregame the center official instructed both me and the other assistant referee to “leave the flag up if you put it up no matter what.” The attacker dribbled directly into the penalty area where he was fouled. The referee had called a penalty kick and the defensive opponent was sent off for denying an obvious goal scoring opportunity. The defensive team pointed to me with my flag up to indicate I had called offside to the center official. The referee came over to talk to me on the touchline. I told the center official that the attacker that was fouled, was offside. BEFORE THE RESTART OF PLAY, he called the first infringement which was offside. He then came over to the defender who was sent off, and was still on the team bench but putting his things away in his bag and cautioned the defender making it very clear with his words and body language “I messed up, you are not sent off, but you are receiving a caution for the tackle in the penalty area that was unsporting behavior.” The referee allowed the player to continue playing for the rest of the duration of the match.Question #1: Should I have gone with my center and give indication for the penalty kick, or did I do the right thing by indicating offside?

Question #2: Does the misconduct still stand, despite the call being changed?

Question #3: Did the referee do the right thing by indicating that the defender was not sent off, but cautioned for unsporting behavior?

USSF answer (January 29, 2007):
1. You followed the referee’s instructions from the pregame conference, which is what you are supposed to do–unless the referee is about to violate one of the Laws of the Game or a rule of the competition. We might note that this instruction should never be given by a referee, other than with regard to serious foul play/violent conduct or when the ball has gone out of play and returned to the field–unless “too much play” has gone on, including stoppages and restarts.

2. Yes, the concept of misconduct should still be considered. an option for the referee. if the act would normally have been called a foul, but did not involve the use of excessive force, the defender should be cautioned, just as the referee did it.

3. Yes.…