Persuasion didn't work. Threats of going to FINRA didn't work. Recalculating my account balances didn't work. Yelling didn't work.
What got me out of the 90-day free riding restriction was paying bail.
I met their so called margin call with a cash deposit and they immediately lifted the restriction on my account. To the other brave cash traders out there, here's more info from both the Fed and SEC.
You not only need to prove that all securities were paid for with cash, but that there's already cash in your account - and perhaps most importantly, that there's more cash coming in.
In my case, I noticed that E*Trade was settling cash much more slowly than the T+3 rule and I pointed this out to them.
I learned two key points:
1. To be a serious trader, I need to overcome this issue, or I'll be hitting at resistance at every turn.
2. I've been a lot less diligent than I should be with accounting. I should be looking at my account balances day and night to keep track of what goes in and what goes out of my account rather than only taking E*Trade's word for it.
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