Home tourney ruling needed

[wdcbooks]

I play a home tourney every week with the same revolving cast of characters. These are good players with casino and online experience and unfortuantely donkeys are few and far between. The game is structure essentially as a Sit and Go, with 1500 chips to start.

I am on the button. Blinds are 10/25. The CO throws out a 100 chip. After a couple of seconds he says, 'Oh I raise to 100'. According to long standing rules, one chip preflop without a declaration is a call. I reraise to 300. The tourney host, a great guy, but a nit for following the rules, says 'Hold on, CO didn't say raise, he called and the raise is from 25 to 300'.

In this case he folded quickly and it was never an issue, but being a bit of a nit myself I wanted to know the proper ruling. Do I regain the option to make any raise I want, or does my raise stand even though the amount was predicated on the CO's mistake?

Thanks.