He told the two that the archbishop of Lesotho had welcomed him to the mission.
"They weren't aware of that until today," he said to ABC after their meeting. Daley says he believes he had called their bluff.
The CRS officials, who had spoken to ABC News before the meeting, declined further comment Monday.
"We are going to let our comments from Friday stand," a CRS spokesman said. "We don't want to keep going back and forth."
Those who know Daley well are angered by the CRS decision.
"This is disgraceful. Everybody is enraged," said Brenda Lambert, business manager of St. Francis de Sales church in Utica, N.Y., Daley's parish.
Lambert supports Daley and says she does not know a St. Francis churchgoer who doesn't.
"He is a wonderful man," she said. "He lives the gospel every day of his life."
James Martin, a Jesuit priest and associate editor of America Magazine, a Jesuit weekly, profiled Daley when he first came out in 2004.
"I think it's frankly astonishing," Martin said of the CRS position. "I find the decision tragic. … Father Daley wants to do a mission that not a lot of priests -- straight or gay -- are willing to do, and he is not seen [by CRS] as worthy to follow in Christ."
CRS officials said that any controversial advocate, straight or gay, would have been removed from the mission, comparing the attention that Daley could receive to that of megastars working abroad.
"Matt Damon showed up where CRS was providing assistance, and the little town couldn't handle his celebrity," Wiest said last week.
"First of all they really are inflating my role as a public figure," Daley said. "Secondly, a priest or any Catholic has a right to dialogue and sharing any differences of opinion and critical analysis of issues in the church. A priest by nature is a public figure."
Wiest said that even if Daley were a divisive advocate of women in the priesthood, he still would have been removed because of controversy.
Daley, though, said that he had never been asked what causes he publicly supported.
"I do support women priests," Daley said. "I am a very outward supporter of women priests. I am also a public supporter of optional celibacy. These are all controversial."
Daley is adamant that it is only his homosexuality, not the debated subject of his advocacy, that is keeping him from what he believes is part of his vocation.
"I was arrested in front of the White House in December for protesting the Iraq war, and I don't think that would have kept me out of Lesotho," he said.
For now, Daley continues to serve his supportive community in upstate New York.
He vows to maintain his advocacy and his pride but still wishes he had the opportunity to serve in Lesotho.
"If I was straight, I would be packing my bags," he says. "I am not a gay priest with apology."