It seems very likely to me that Dragoncon _can't_ withdraw nominations from consideration. What can be seen about the nominating and voting process suggest, strongly, that all of this is "automated." That is to say, they have some software that tallies nominations, and then votes. Everything about their organization of this award says that it is not well-organized, nor does it command a lot of resources, especially not in terms of volunteer hours. I think they thought that running a major award would be easy, that all you'd have to do was just set up the best software... Yeah, no.

This is a mess of their own making, born of not really thinking things through, and I have only limited sympathy for them. But I suspect that they genuinely have no ability to change course, that all of these problems are baked in.