What do you think the ruling should have been or do you agree with the rules committee?

I recently participated in a golf tournament put on by the Chicago Park District.  During the tournament there was a very unique rules decision that I wanted to share with my readers.  Here is my version of the story, please hold all questions until the end:

Player 1 tees off on a par four with OB right.  The OB right is marked with a 10 foot high fence, guarding the property line from the lake front path.  Player’s 1 ball is very close to the OB line (more than likely out).  Player 2 tees off a little right, but not far enough right that he would need to hit a provisional ball.  Player 1 hits a provisional ball.  Player 1 and 2 are both looking for their tee shots.  Player 1 is next to the fence and sees a ball maybe 15-20 feet outside the fence line.  He asks a random jogger “what kind of ball is that”.  Instead of checking the ball and reading it to Player 1 the jogger picks up the ball and tosses it over the fence to Player 1.  Player 1 catches the ball and notices that it is not his golf ball but it is Player 2’s ball.  Out of shock Player 1 drops Player 2’s ball right where he stands (just about 5 feet inside the OB line).

Player 2 is called over and now sees his ball 5 feet inside the OB line where Player 1 starts to tell his story.  Now just to be clear no one saw the first half of the story.  All we can go on is what Player 1 shares with us (not that I think that player 1 was doing anything weird, but that is an important aspect that I believe effected the outcome of this rules decision).

Player 2 sees that his ball is in bounds, but then is told the story of the jogger and we are all at a loss of what the correct rule is.  Does Player 2 go back to the tee?  Even though his ball is clearly in bounds?  Does the jogger count as an outside agency?  Can a competitor effect another players ball with out any consequences?  Are we to believe another competitor that a ball was out of bounds but now it is in bounds even though you cannot play it?  The Chicago Golf Guy in all his wisdom does not know the answers to these questions.

What did the rules official do in the tournament? 
After several minutes of decision making process, several radio calls, and eventually the GM of the golf course coming out to hear the problem: the rules officials declared that the ball was in play where it lies, and Player 2 could finish out the hole from where is his ball currently was.  There was no rule of golf cited (such as under rule 31-b a player can blah blah blah) just that Player 2’s ball was live and in play.

What do you think? 
I would love to get some feedback on what you guys think the correct ruling is or what you thought should have happened.  I am very much at a loss on this situation and would appreciate some feedback.  I believe I have a very good understanding of the rules of golf, but this is one of those weird situations, that I am not sure what the rule exactly is.  Let me know what you guys or gals think…