Car dealer shotgunned my credit and inquiries are getting me turned down.

I bought two cars, about two months apart. I realized this would be a temporary negative mark on our credit, but never expected what I am now seeing...
This dealership sent our credit out to eight different companies for the first car, and then NINE different companies for the second car purchase. At the second car purchase, I had actually specifically requested that they work with one lender in particular (our credit union) and they said they would contact them first. Now, seeing my inquiries, it appears this is the only lender that they DIDN'T contact.
A few months later, we applied for a small credit card to use as a bill-payer, to keep increasing our credit. The CSR denied our application, and was very sweet about it. He said, the ONLY thing that was keeping us from being approved was this massive amount of inquiries for the autos. (verbatim)
Now, as I read, the credit scoring system is supposed to take into account these multiple inquiries and group them together when made in a 14-day period. However, this apparently isn't happening on our report, or the other credit card rep's system would not have automatically denied us.
I have read that this "shotgunning" approach is illegal, but I've also read that it's just an icky policy. Which is the truth? And, how do we go about either removing this mass of inquiries, or consolidating them via correct coding or whatever so they won't all count as individual inquiries?
--------------------
shotgunning is not illegal
you should hae trid to set up finance before you went to the dealership
your credit must be bad OR there would have been no reason to shotgun your application
you must not have a copy of your credit report or know your credit score
almost NEVER is one truned down over inquiries
My bet is your credit is bad AND has many inquiries.

check your credit and get back to me
-------------------------