No, it doesn't allow you to either self-deal or act against against the will or best interests of the person who granted it. Washington follows the Uniform Power of Attorney act as embodied in RCW 11.125. If this was deemed an abuse of the POA, they indeed didn't need to involve you in undoing it.
You made what appears to be a bad POA, acted improperly under the POA, and failed to have a valid contract for the other things you did. Now you're paying the price. You should have had an attorney then, you'll need one now if you want to press the issue.

