I have had a similar experience. I contacted the supervisor 3 times while I was in my final year of undergrad degree discussing possible projects and grants that I could apply for. He said he would contact me if any project funding came up. However, I checked before the week before I went for another PhD interview and when I looked on my return he had advertised a project and I had just missed the deadline (it was advertised for a week!). I emailed him sending all the information I needed to apply anyway, and he just said that they were interviewing next week. I was furious because it was the project I had been waiting for and I had lots of work experience that was relevant. Luckily I got a place somewhere else and am happy here, but it really turned me against that one guy because I felt betrayed.

Oh yes ... it's who you know that's important! It's a waste of time when they do that and unfair to the other candidates! But unfortunately you will find out academia is inbred and networking is the key! That really sucks especially when you find out afterwards and you get the standard reply for feedback if you're lucky. Unfortunately you can't doing anything about it - just give it your best shot and you never know
what doors it might open! Opportunities come when you least expect them
so don't get too hung up on going to a particular place or project!!! You've got to learn to work the system - it's not fair! There is also some luck involved so good luck!

Poor you rejection is bad enough but the disrespect of being messed about...that's just rude. This is why I hate EO laws! If they have their desired candidate, why on god's earth waste already scarce funding, academic resources and a stressed PhD-hunter's time? Grrr