Well I wouldn't expect you to quit over it... you weren't cheating... he was... and it wasn't cheating in the race so much as cheating his kid.
Even if he wants to do all that, bring the kid in, show him what you are doing, and explain why... let him help.. etc etc etc....
I am waiting for Son to tell me what style of car he wants this year... so we can get started cutting the block and shaping it.
If you can get it check out a movie called "DOWN AND DERBY" its all about a neighborhood of fathers who go completely bonkers when the Pinewood Derby comes to town....
One scene the father pulls out formal blueprints for the car... for him and "his son" to make.. the wife asks him, "when did you have those made?" His answer "As soon as I found out it was a boy"
I just think it would be better to only help the kids with the finer points of carving etc., rather than offering more advice and guidance than the kids are asking for.