A visual is done BEFORE you hydro a cylinder, not the other way around. The vast majority of cylinders fail the visual, not the hydro.
There are a lot of unanswered questions here; before a hydro, a hydro shop (who you can usually put in the knowledgable category) WILL visual a cylinder before the hydro. What it sounds like is that the dive shop (which you can usually put in the doesnt have a clue category) shipped the cylinder off to the hydro shop, the hydro shop vized the cylinder, hydroed it and then returned it to the LDS who did a visual and for whatever reason failed it.
Did you sign a release that allowed the cylinder to be condemned? A release should always be signed before accepting a cylinder from the customer to avoid problems such as this. If your cylinder comes back condemned (by Xing out the DOT numbers) you dont have any recourse if you signed a release. If your LDS didnt have you sign a release, that just adds another datapoint to the doesnt have a clue category.
You might find out what hydro shop the LDS uses and go to them and talk to the inspector on the off chance they might remember your cylinder (its a long shot) and see what they thought of their visual.
If youve got any more information, no matter how small it might help us reconstruct what happened here.
Any time you hand in your cylinder for a visual you should ALWAYS be prepared for it to be failed. Two things to learn from this:
1) Learn to take a peek inside your cylinder before handing it off to the shop.
2) ALWAYS TAKE YOUR CYLINDER TO THE HYDRO SHOP DIRECTLY, DONT GO THROUGH THE LDS!
Roak