Gee, I hate to contradict these announcements but today I made a reservation at the Holiday Inn at 525 Henley Street in Knoxville, one of the supposedly unavailable conference hotels. Even better, by going directly to the hotel's web site, I got a rate that was a few dollars cheaper than the FGS "discounted" price for rooms at that hotel. I never mentioned the FGS and ended up with a slightly cheaper price. My reservation was made entirely online, no phone call involved.
The moral of this story is to investigate things for yourself. Get suspicious and get creative. The money you save can be used for other things, such as buying things in the conference's exhibits hall.
I have no idea how long these cheaper, "non-conference" rooms will last, but you might want to check http://www.holidayinn.com/hotels/us/en/knoxville/tysec/hoteldetail