I think if you didn't know when you received the sign it had bondo in it, why would you expect the auction house to know it ? I would also say that knowing it had been cleared and if you didn't like it being cleared you should not have been a bidder on that sign.
I think all auction houses say regardless of what is said on the auction block or the description in the catalogue, it's the buyers responsibility to make sure you know what your bidding on.
Definitely after you have altered the sign, you would have no way to expect them to give you a refund ( partial or full ) or take the sign back.
I think you need to chalk it up to another lesson learned and move on. Too bad Bryce, but we are always learning..
ps. I personally don't think this should reflect on Morphy's Auction house or any other auction house. The situation and result would be the same.
So to answer your original question Bryce I don't think you were a "fool" or "mislead", it's just a "lesson learned"..