Baserunner hit by batted ball

Question
Runners on first and third. Batted fly ball hits first-base runner when she is about 2 steps off the bag. Third-base runner advances home. Plate umpire calls a dead ball and rules first-base runner out, batter safe at first, and third-base runner safe at home. Is this the proper call regarding the third-base runner?

Answer
Hi Seth,  

when a runner is hit by a fair untouched batted ball AND the umpire calls interference, we have a dead ball, runner is out all other runners returned to the last base touched at the time of interference and the b-r is awarded 1st base.  R1 should have been returned to 3rd.

Sounds like they got only 1/2 of it right.

Mark