Well, heck. Just spoke w/ a guy who has worked as a scorekeeper for college teams, and his view makes me totally wrong:
Anytime a batted ball hits a runner before passing an infielder, the runner is out, the batter is credited with a hit, the batter is put on 1B, and all runners return to the base they had at the time of the pitch, unless forced to advance.
That just seems insane. Hit your runner, get a guaranteed hit.