ah ok. Well they made their own decision by puting that statement in the disclosure, "Free DVD of Digital Negatives" I would try first try talking to someone higher up the chain of command. Also if you havent paid, don`t just yet. IMHO I dont see what the problem is for them. Just give you the darn RAW files. I know lots or places tend to do this because they want your money for the photos. If you get the negatives, you might run-off and get them printed at WalllyWorld of target essentially screwing them out of their profits (the photos being printed). I would ONLY suggest playing the "lawsuit" card until ALL options have been exhausted. Usually when you say your going to sue them, they quicly hang up!
My best guess is that they simply want the money for the pictures to be printed, becasue I would bet 10 to 1 that the tiff of Jpg files will be low res.