I generally find it best to remain nice, but nice to the point where they don't think you're a pushover. I hear friends say they won't shop in X place again or buy Y product because they received bad service, and I always think this rather petty. One store isn't a reflection of a brand.
With your case I can see why you'd be angry, but a full refund? If I were you I'd try and act as though I could see the problem I'm causing, but at the same time level with them the fact that it was shoddy service on their part. You never know, they might refund the alteration costs: IMHO they should do this. At the end of the day, if they make the alterations and the suit is lovely, you might regret the refund. (unless of course you mean that they refund the costs and you keep the suit?).