Mike
Your flight school were simply wrong - all FAA license holders must have a current US flight review in order to exercise the privileges of the license - particularly piggy backs (follow the logic - who needs it most, the guy with twenty years experience in the US or the newcomer from a foreign land?) - besides which there is no "letter" when it comes to the FARS, they say what they mean and they mean what they say - you may even have been flight reviewed without even realizing it, it's an informal chat for an hour or so and an hour in the air, possibly indistinguishable from an detailed pre-rental check out - the important thing is that your log is endorsed by the FAA CFI.
I've had several pilots piggy back to be able to fly my plane (US reg) in non-US airspace, getting to the field office in St Thomas is difficult for most (yes, US territory and so Barbadians need a visa) but the flight review is a must and can be carried out by the US FAA instructor living down here if not done up there.
One rather interesting point about licence shuffling - one can get an ICAO approved PPL here in 35 hours and then piggy back - you do earn it though - the qualifying cross countries are rather interesting 100 miles over open ocean to another island - I'l FAA all the way but I'm rather glad I didn't have that experience
