I know it sucks - but already we’ve had three distributors who first said “not interested” to the pitch, change their minds when they saw a picture of her.
At the end of the day you made the right decision. When people are depending on you to pay them you can't afford to get too precious about getting the film sold. I understand what cinematography is saying, in that you should be able to say "Hey, I'll just find a distributor who doesn't need some hot chick on the cover to sell a film," but in reality it's just expensive and time consuming on feature production to turn down a distribution deal.
The flip side of this, is that there are market places for "Arthouse" films where the less attractive actor may have been a bonus, it's all about how the film is packaged, because the direct to DVd market in the UK isn't that large, the arthouse market tends to be one of the main European selling arenas, The truth is that this market place has slightly different requirements.
Interesting discussion and a good lesson for me on not making assumption about other people's processes. I'm good, but I still can't read minds