Tier 1 Denied--2 Sources to Verify Income

I was denied because I sent in a w2 and a letter from my employer.  Advice on appeal or what to do?

Looks like they got me.  Is there any foul in reapplying?

There is no foul in reapplying.  In fact if what was wrong can be corrected that is the best way to proceed.

Generally with the PBS, if it is clear that you didn't meet the particular bit the of the guidance, an Administrative Review will simply result in you being quoted the same section of the PBS Guidance.

Outside of that, there are usually no grounds for a proper appeal.

So do I check off that I have been refused a visa and then explain?

Yes!  If you didn't, they could (and likely would) refuse you again but it becomes an escalating seriousness, because you then are considered a liar then as well... 

Being refused happens to a lot of people.  Generally doesn't have bearing on future applications other then they will usually examine the reason why more closely, but in your case it being not quite the right proof it should in theory be fine.