BTW, if you checkout the salary level at glassdoor.com, a good engineer/developer salary level is higher than most of the "PM", Director. A lot well run company knew this and respect this.
Personally, I was moved to Marketing/PM type of roles for a while, hated it. Too Much politic, a lot depending who you know, party with, etc.
Good engineers/developers got respect from what you know and how well you code, understanding of issues and formulate/architect a solution. Ok, I am a geek.
Find a position that you want in the company where you are now, or find a position that you want somewhere else. It doesn't have to be a full-on 100% PM job. After all, the guy you mention apparently only has a year experience himself. Everyone starts somewhere and somehow. Everyone.
It won't be easy, but it will never happen if you don't try.
As for the specific issues you have with that other guy, those are merely details and they will instantly be irrelevant once you move up or out. Forget about that immediately (I literally mean right this second), and put all your energy into finding your next position, internally or externally.
Get to work. :)
A while back, a really senior co-worker left the company I was working at. I knew he worked on things that interested me so I went to the head of the department and asked to take over his work. If I had not stepped up, his work would have been distributed out over the team and I wouldn't have had the opportunities I've had since.
If you want to be a PM, ask to be considered for a PM role. If you don't get it then apply for PM roles elsewhere. You are rarely given help in this world, so take every opportunity you can possibly get.
* Did they provide you with reasons why they don't want you in that role? Since they set the rules, you need to know what they want.
* Project Management is more about social rather than technical skills. Are you a good communicator? Does your employer know that?
* I don't know anything about your skills, but you've just written 260 words in one wall-of-text paragraph. It wasn't that hard to read, but that's not proper style.
Sorry for my big para. That is what I am concerned about. What do you think is the good style? I fear I don't know these things. That is what I think I lack. Please help me get to a better style.
It explains the basics – styling, structuring letters / emails / memos, choosing the medium, etc. I'm sure there must be lots of free resources available online for such a popular topic, but I've never looked it up.