Dilemma: too few internship hours, but FA ofc says I'm "done"

Hello --

I'm in an unusual situation, and am hoping someone here can offer some
enlightenment.

I'm a FT community college student, 48-year-old HS dropout w/GED, in a
56-credit medical transcription certificate program.  One of the required
classes is a 5-credit (150 hour) work internship.

I had initially wished to pursue certificates in both transcription and
medical coding; however, the sequence and scheduling of the coding classes
has been problematic.  (I started school in the "wrong" quarter, then
compounded the "wrong quarter" problem by landing a 7-month FT job in my
old industry and consequently taking 2 quarters off from school.)  

Since I had to choose ONE "major" per Financial Aid, and the transcription
classes (unlike the coding classes) were available all quarters, the choice
was obvious.

I would have been completing my last requirements for the transcription
certificate at the end of this quarter (mid-December).  However, my
assigned internship site hasn't been able to provide anywhere near the
requisite 150 hours.  (It's not scheduling conflicts, either -- I've made
myself available literally ANY time they had work.)  

My instructor (who is also the program chair, as well as being my advisor)
isn't concerned; she says this is a common occurrence, and she routinely
gives a grade of "Incomplete" and allows students to complete their
remaining internship hours in the following quarter.

Obviously, I'm frustrated -- especially since I flagged my instructor very
early on that I would be way short on hours.  However, I do *not* want to
embarass or create a problem for my instructor.  For one thing, she's been
terrific in everything up to this lining-up-internships point.  For another
thing, she's also the main point of contact/referral for job placement
after graduation... and even in this supposedly high-demand field, recent
graduates are having considerable difficulty finding work.  (A large
hospital consortium in this area recently outsourced its transcription work
to India, presumably a significant contributing factor to the sudden local
turnaround in demand.)

I would be happy to continue for another quarter -- especially since
another of the coding classes I would like to take is finally offered next
quarter! -- and I could flesh out my schedule to FT with a course that is
"recommended but not required" for the transcription certificate.  

I have taken only one (5 credit) class that was not a requirement for the
transcription certificate -- a coding class.  (Not surprisingly, there is
considerable overlap of required courses between the coding and
transcription programs.)

However, the college financial aid office has now notified me that I am
ineligible for financial aid for next quarter, since I am expected to have
completed all required courses for my certificate at the end of this
quarter.

I am concerned that, even after I inform them that I will NOT be completing
the internship requirement this quarter, they will consider it unnecessary
for me to be enrolled in classes next quarter.  (After all, I don't need to
re-enroll in the internship class with a grade of "I.")  And of course if
it's not necessary for me to be enrolled, they're certainly not about to
consider any financial aid assistance with tuition.

The two possibilities that occur to me are:

Option 1:
**** Change my "major" at this point in time to Medical Coding.
  Question:  Would this solve the financial aid eligibility problem, at
this late date, for the coming quarter?
  Issue: (I know the answer to THIS one won't be forthcoming here, but it
may limit my options.)  I'm receiving state unemployment "Training
Benefits," and changing my major may well cause a major problem with
unemployment.  (I have an appointment to talk with someone at the
unemployment office about this issue.)

Option 2:
***** Ask my instructor to fail me in the internship class, rather than
giving me a grade of Incomplete.
  Issue: Since I've worked hard to maintain an extremely high GPA, I really
*really* hate the idea of having to choose Door #2, here.  Especially since
I'd like, at some future point, to be able to pursue further education, and
my GPA is high enough that it might help me win scholarships, or at any
rate have more choice of colleges.

Suggestions?  Wisdom?  Other options I haven't thought of?

Thanks for any thoughts you care to share!

-- Michelle

Please, Don't Breed or Buy While Shelter Pets Die.