I received a cease and desist letter from well-known .com

Good call. Ive currently had to back down a couple times on one of my sites over content issues (not domain issues). If you don't have much money or are a busy person like me, its not worth playing legal hardball and risking them suing you even if it is a joke lawsuit. Also they could come up with other ways to get even. And I think in your case, the people in question might have more of a case against you then with mine.