Ineligible EE allowed to make deferrals: correction?

An ineligible employee was allowed to make several deferrals. (She works less than 20 hrs a week)

 Usually, the correction is to either make an amendment to allow the person early entry or to refund the money.  This is a 403(b) plan, so I believe the former is not an option due to the universal eligibility rules.  (I thought if you let one of the <20 hrs people in you had to let them all in...)

 But, before this was caught, the account was reduced to zero via monthly fees.

 Are we done?  Or does the account have to be sort of rebuilt and distributed so the taxable income is realized by the employee?

My thought is the same as yours regarding the amendment - if you include one in the class, you must include all (although in this particular situation, I am not 100% sure).  If the retroactive amendment for the one participant is out (which otherwise would likely the best option), I'm struggling with whether to be done since the account has already been reduced to zero or "rebuild" and distribute the ineligible deferral contributions (adjusted for earnings).  If I was the plan sponsor/administrator making this decision, I would vote to rebuild (removing the monthly fees) and distribute the account (adjusted for earnings).  The error is at least partially the responsibility of the plan sponsor (and third-party provider) and think this is the most reasonable correction method.
 

It would seem that dollar amount of deferrals made by a part-time employee that could get wiped out by fees would have been a small amount compared to the value of the time and effort to analyze and implement the perfect solution that dots the i's and crosses the t's of every possible correction method.  Consider keeping the plan out of it since technically the plan accepted the contribution sent to it by the employer and the plan applied fees consistently to all participant accounts.  Suggest to the employer that they pay the employee at least the amount of the deferrals that should not have been taken from the employee's paycheck, and include an acknowledgment that it was a payroll error (not a plan error).