Pocketed Pocket Cards at Mirage

Last night, I was playing some poker at Mirage when our table was confronted with the following novel and somewhat bizarre poker rules question that took the concept of "pocket cards" way too literally. How would you rule?

A new player had just joined the game. On his second hand, he went all-in, lost, and was felted. The player stood up to pull more money from his front pants pocket as the dealer pushed the pot, moved the button, and began dealing the next hand. The player pulled out a wad of bills and peeled off three one-hundred dollar bills for his rebuy. The player also happened to be the big blind. After finishing the deal, the dealer took two of the one-hundred dollar bills from the player and converted them into chips. As the dealer was doing so, the under the gun player called the $2 big blind, and the next player raised to $10.

Suddenly, the player who was rebuying said loudly and with some heat, "Why didn't you deal me in?" The dealer assured the player he had been dealt in. The player, however, pointed to the table and said, "Where are my cards?" The dealer halted the action, and after a few moments of confusion, the source of the problem became clear:

The player, when putting away his wad of money, had also picked up his cards and put them in his front pants pocket with his cash.

As the player pulled his cards out of his pocket, debate broke out amongst the other players as to what should be done. Several players felt the hand should be declared a misdeal because of the concern as to game integrity. Other players felt the hand should continue because "significant action" had occurred, albeit while the dealer was focused on breaking the bills and dealing with the confusion over missing cards rather than on the hand action. The dealer promptly (and correctly) called for the floor.

If you were the floor, how would you have ruled and why?

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SPOILER ALERT (Ruling below):

The floor ruled that the hand of the player who removed his cards from the table was dead. However, the rest of the hand was played out in the normal course. Then, the floor had a new set-up (new cards) brought to the table.

At the time, I was mildly supportive of the idea of declaring a misdeal of the entire hand, based on a concern for the integrity of the game. However, on reflection, I think the floor handled the situation correctly. The cards in play on the table and in the dealer's deck remained untainted by the cards taken off the table once that hand was declared dead. Regardless of the significant action rule, there was no real reason to re-deal the entire hand so long as the hand taken off the table was dead. Also, bringing in a new set-up was wise simply to be certain nothing inappropriate was happening. Declaring a misdeal of the entire hand would permit potential angle-shooting mischief between partners at the table who could kill an opponent's good hand merely by taking their cards off the table and putting them in their pocket or dropping them on the floor, etc.

So, altogether I think the Mirage floor handled this wacky issue quite well. And I expect never to see that situation occur again. Never ever.