The 1 degree is no issue...but the half inch extension you should send back for it...otherwise they'll put  an extension on your club...think about it...you just paid good $ for your clubs...send them back, get it right.

1/2 degree flatter and same length achieves the same objective as 1 degree flat and 1/2 inch longer. Think about it for a minute. If a 9 iron is 36" long and 64* lie angle, an 8 iron is 36.5 inches long and 63.5* lie angle. A 7 iron would be 37" long and 63* lie angle. If you flattened the 9 iron by 1* it would now be an inch short.

If they recommended a 1/2" longer, it was because your posture at impact indicated you needed additional length.  I don't know the policy at your local retailer, but the easiest process would have been to order the set at 1/2" long and 1 flat if they do exchanges.  Otherwise, your retailer can send it back to us and we can reshaft and bend your clubs.  There would, however, be a charge.  You might want to check with your retailer for options and costs.  

Now after reading all this, making sure you have correct posture at both places is a key thing along with conditions being ideal and identical (perfectly flat hitting surface).   That could skew the fitting.  I agree with everybody else - exchange the clubs (there is a warranty if they don't perform to your expectations).  Places like Golf Mart (Roger Dunn) and Golfsmith have these kinds of guarantees.  Places like Sport Mart or military exchanges don't really have qualified fitters.

Demo days may or may not be accurate.  For instance, they periodically have them at a couple of the military golf courses in San Diego.  The problem is the driving ranges are not perfectly level and you often have to hit off an uneven lie (one of them is this way when hitting on the grass - the mats are perfectly flat; the other has one hit ball below the feet on the right end and ball above the feet on the left end and somtimes you have to hit on a downhill slope depending on where they position the tee markers).