Bug Report: Range Calculated Incorrectly

I was playing a TF2 vs TF2 game on the map with the railroad tracks and I encountered what I believe was a range calculation bug.  My team was down to two characters, a demo and scout and my opponents team had only a heavy left.  I posistioned my demo man in the top left corner of the map, behind the crystal while my scout was directly in front of the bottom crystal (the left side of the board was my side).
 
My opponent's heavy was on the square between his spawn locations. He then moved forward with three moves, putting him on the square diagonal from my train lever.  From that square his heavy was able to shoot my demo with his next two moves and kill my wounded demo sealing the victory for him.
 
According to my understanding of how the game calculates range, this should not have been possible.  Could you please confirm if this is a bug or not.  Thanks.
 
 
(btw, nice Drupal install... hope i see you guys at drupalcon this spring!)
 
EDIT: After chatting with my opponent, he revealed that he was targeting my crystal and not my demo and this explains why he was able to hit me while being more than three squares away.  Sorry for the bad report.