When I read and hear about travesties such as this one, I stop for a moment and thank God that He never subjected me to such things first hand. I grew up in a relatively modern parish throughout the '80s in the relatively liberal Diocese of Greensburg (PA). Our church building was one of those auditorium looking types with no high altar, tabernacle in a side chapel, etc. We were subjected to horrible OCP music, for sure, but our pastor also made sure that we knew all the old hymns which my father always sang with gusto (much to my mother's chagrin, as he's tone deaf). Some of the priests would use incense every now and then, particularly one priest who was ordained in the early 70s but always ended Mass with "Hail Holy Queen" in Latin. In retrospect, our parish had its foot in both camps, holding on to the traditions with one foot and trying out the supposed progressive and new things with the other.
But I never, ever experienced the horror stories I hear from people, my wife included. The closest I came to being subjected to ridiculous abuses was at her old parish, staffed by Franciscans. The pastor, who according to my wife told a full church on the feast of the Annunciation that the Theotokos "was unimportant", literally came out into the nave during the Pax and made us all hug our neighbors in the pews. Being the petulant liturgy geek that I am, I refused, pecked my wife on the cheek as is our custom, reached across the pew and shook the hand of another 30-something who also seemed glad someone else was refusing to get all touchy feely. The priest looked annoyed. I wasn't going to communion anyways, so that was the last I saw of him. But I digress.
He also forbid my wife from confessing to one of the parochial vicars there because, and I quote, he was "the pastor and everyone in this church must come to me for that sacrament." Nevermind the fact that he was not this other priest's superior and that my wife had been going to him before the pastor arrived. She stopped to confession after that and really hasn't gone since.
From what I understand regarding canon law in the RCC, any priest can hear any layman's confession (barring imepdiment from the local ordinary or religious superior) at any time. Fr. Z just wrote an entry about this over at WDTPRS. It's one thing when a priest tells you during confession that you need not be so scrupulous or that what you did wasn't really a sin or that he will not grant absolution because he doesn't think you mean to change your behavior; that's his perogative, especially if the priest is one's regular confessor. It's entirely a different matter when clergy and religious tell a penitent that, in essence, confession doesn't matter.
I agree with lubeltri. The bishop must be alerted because this is a matter that seriously can affect the salvation of souls. Stuff like this makes being subjected to Haugen's Mass of Creation nothing in the greater scheme of things.