psiprez

I understand how frustrated you are, but no need to worry.
There are two ways of handling this, neither will get you deported:

1. Refile as instructed by the IO. (this is the easiest, and maybe quickest, option... but will cost you another $680)

2. Fight for a reversal of the original decision. (lots of stress and frustration, might take longer... might save you from paying another $680)
I'm not quite sure the best way to fight would be, but the Ombudsmen seems like a good bet.

The fee we paid was something ridiculous like $75, but then we wouldn't have seen any of the money if we had not paid that.
It could definitely be because it is a credit union. They probably aren't set up to handle those foreign transactions. The bank I worked at was one of the biggest multi-state banks. Maybe try opening an account at one, even if you just close it after you get the check deposited. You would be taking a hit in fees, but it's better than not being able to cash it and seeing NO money at all.
BTW...to avoid any issues with foreign checks again, I opened a separate Free Checking account (and keep $10 in it). this is my "transfer account". I felt bad that my kids would get birthday checks for small amounts, and that we couldn't deposit them. We gave the account number to a trusty relative back in England, and if anyone wants to send money as a birthday or holiday gift, they can wire us the money to that account. Cheaper, easier, and we never have to give out the number of our main account.
One more thought... would it be worth it to contact your former employer and explain the situation? Perhaps they would be willing to put a stop on the check and wire it to you or something.

I agree.