The definition of an "appraisal" for purposes of providing a copy under 202.14(c)1.iii includes an internal review document if it reflects a different value than the 3rd party appraisal. The way this reads, it would seem to include the bank's internal appraisal review (under these circumstances). If this is correct, then a copy of the appraisal as well as the review document would be needed? Am I missing something? We're going round and round on this - I would really appreciate another opinion.

Sounds like you got it. If you have an appraisal, but you change the value to something else - you have to provide them the information and paperwork you created to justify it.