Gizmo appears stuck on the idea that the DM is lying and cheating. Yet, if the DM has absolute control over the game world, then how is he cheating. He states that the spell did not work because the description the players gave was not thorough enough. That's working within the letter of the rules. The spell does state that you have to be very specific.
Are you "stuck" on the idea that I'm stuck on the idea? Maybe I just *have an idea*. Maybe what some of you are saying to counter the idea that I'm "stuck on" is not very convincing. The above statement is an example. And here's why:
First of all there is some question about how absolute the DMs control is. There's no statement in the Players Handbook that says if the player rolls a 20, and the DM doesn't like it, he can declare that the player didn't roll a 20. And what happen to the (rather unconvincing) statements in the DMG that say that the players are supposed to contribute to the game? It's all well and good I guess as long as the player's contributions mimmic what the DM would have done anyway. That's not contribution - and IME people who are of equivalent intelligence and maturity are quickly going to detect the con.
And strictly speaking, you're not working within the letter of the rules. You did not fail the Observe Creature ritual because of it's lack of specificity. Again, if your players aren't stupid and you've used this ritual, or any ritual or spell like it and with similar requirements in the past, the players are going to be in a pretty good position to compare your previous rulings with this one, and they're going to call shennanigans for good reason.
And you're going to be insulting their intelligence, and hurting your own integrity, by claiming to make the judgement based on the facts of the game when you're really only failing the spell to protect your plot.
Worse, if you actually talk yourself into the rationalization that your decision was based on the "letter of the rules", the player's aren't going to suddenly forget your previous rulings, and it will be obvious to them that, at best, the DM is also not being honest with himself.
Is it the best solution? Nope. Not by a long shot. The best solution would be for the DM to be able to extemporize an entire session out of his head and make it interesting for the entire group. That would be absolutely fantastic if everyone could pull it off.
Unfortunately, most of us can't. Sure, we all might have that one or two session that we pulled everything out of our hat and everything worked great. I'm also absolutely sure that we've all tried it and fallen flat on our faces.
What are you describing, figure skating? The 4E DMG describes player motivations on page 8+. What you're saying just doesn't seem to take into account thinking, motivated players on the other side of the screen. Plus, anyone who casts Observe Creature and expects it to work is probably going to consider the DM as having fallen flat when he starts nerfing rituals willy-nilly. There's a large spectrum of enjoyment worth considering that lies between the two extremes.
Remember, the quote is not saying "do this every time to keep the players on your tightly scripted tracks". That is absolutely not what it's saying. What it IS saying is, "if, despite reading this advice, you choose to ignore all of it, and screw up and forget about some ability your PC's have, then you have the power as DM to nerf that ability". Note it does not say that you should do this. It ONLY says that you have the authority to do so.
Then say it in the PHB. Say it to your players. If it's such a *right*, then why is the DMing lying to his players about it?
And the statement says "If conditions A apply, then do B." If I see conditions A as being pretty common in the game, then it's fair for me to conclude that the DM is being told to do B pretty often. It doesn't need to be said explicitly, it's a reasonable interpretation. If you're suggesting that the conditions set forth in the DMG I quoted aren't common, then that itself is arguable.
Is anyone actually challenging what's written here, rather than what people seem to think is written here?
Well all writing has to be interpreted. Are you so sure that your interpretation is the right one that you're stating that without proof? What's *actually* written there is that the DM is going to lie to the player about a ruling.
Does anyone actually think that DM's do not have the authority to over rule game effects from time to time?
It's not a ruling actually. That word "ruling" stems from an implied set of "rules" that require interpretation. Deciding to do whatever I feel like doing and telling everyone else they have to go along with it is not a "ruling". Unless my word is law - in which case the Core Rules of DnD could be A LOT shorter.
And this isn't "time to time". That's equivocation that masks what's really going on. Observe Creature is an important and expensive ritual. And the event that it's impacting is at the core of the DMs adventure. Both player and DM consider this a very important event in the context of what was written. This is not a case of the player taking either 7 or 8 points of damage. So "time to time" is not a really good-faith assessment of the situation.
The only thing this seems to me to be destroying are *your expectations* - and it's very presumptuous IMO, though consistent, to get those mixed up with the campaign. 
