Honestly, this seems pretty reasonable to me. I also don't think that the Common Markdown implementors gave Gruber a sufficient amount of time to respond: "We haven't heard back after replying last night, and I'm not sure we ever will..." (emphasis mine). Last night? This is one of Gruber's most famous projects, and you're giving him hours to respond?
Honestly, I think they're going about this the wrong way. This group has people at both Stack Overflow, Reddit, and Github, three of the most prominent users of Markdown. Why not rename their version completely? It would eliminate the possibility of future conflict (which IMO is almost guaranteed). They don't need the name recognition--Markdown has needed this for a while, and I think it will be adopted fairly quickly.
As for "new" names, how about:
* ReMD (pronounced "remedy"): fairly standard programming naming convention--adding "Re" as a prefix. Also easy to Google.
* Vernacular: Longer, less common word.
Good luck to Atwood and Co.. I really do hope they find a way to keep the project going.