Kalis, get a calendar and mark it available, booked, and closed. Very simple. I do not share my site but in your unfortunate circumstances, I will if you pm me. I also have my refund policy on the site.
There is a book out that deals with this very subject. After this story, we should all be even more aware of the havoc that can be caused by one dissatisfied customer. This is what I tried to convey all along. The plus of this new marketing arena is that it is relatively free to get your name out there. In the past, multi thousands were spent on name recognition, even for small companies. Now, your budget needs to be spent on positive PR for your company. Example... a person posted a negative review about a restaurant. The restaurant, always monitoring the social media, picked up on it. the owner replied personally, stating that he was sorry the person was not satisfied. The owner invited the customer back to the restaurant for a free meal to find something he liked. After several tries, the customer found several things that he liked and now can't say enough good about the restaurant. Many people mistakenly look at giveaways as money out of their pockets when it is, in fact, an opportunity to practice good PR.
There is so much information based on proven practices and case studies that could have stopped this situation. But just as with many big name corporations, they don't listen until a crisis happens. I'm one of those who likes to learn from other peoples' mistakes. I don't feel the need to make them all myself. This is unfortunately, exactly the situation that I suggested she avoid when this thread began.
We should be thankful to Kali for putting herself out there. This will be an eye-opener for some and ignored by others.
Kali, you were on the right path in this situation. Listen to your business heart. You have the ability to rise from this, but it will be tough. After the dust settles, you need to email all of your clients with an explanation. Be careful not to trash the customers, but explain the situation and reassure them. This is the first step. If you have other faults in this, you don't have to share them here. I think you have been brave enough.
Fro anyone interested, the book is,Satisfied Customers Tell Three Friends, Angry Customers Tell 3000, by Pete Blackshaw. This book has a five star rating on Amazon.