Employer J maintains a 401(K) Profit Sharing Plan. Under the plan, an eligible employee is entitled to an employer match contribution of 100% of the employee's deferral up to 3% of compensation up to the §401(a)(17) limit. During the 1994-2000 plan years, an eligible employee, Employee W, inadvertently was credited with an employer match contribution based on compensation above the §401(a)(17) limit. resulting in an improper allocation for seven plan years. My correction for this defect based on Rev. Proc. 2001-17 would have been to take the improperly allocated match amount from Employee W. and place it in an unallocated account, similiar to a suspense account, to be used to reduce future employer match contributions in suceeding years. I have been told by some that the excess employer match contribution made to Employee W. should have been allocated to the other employees in the year of the failure under the Profit Sharing feature of the plan. Though the plan does have a profit sharing feature (discretionary), it has never been utilized by the employer since the plans inception. What is the most proper way to fix the defect described above?

That's great, you can point to a Rev Proc that tells you the method to correct (example 19 of 2001-17)

guess I would ask them to point to an example that says their correction method is correct for a 401(a)(17) failure.

you didn't indicate what correction method you were using.
7 years is quite a number of years for an error to keep occurring!
I know those things can happen, still...