Then I would go to the Sheriff's office and file a complaint against this officer. You have all the relevant information. You might want to start researching what it would take to get any reports that are submitted, copies of radio traffic, whatever.
Just ask for your permit back and ask for followup information. Do not sign any waivers.
I am not a lawyer, nor do I play one on TV, but it appears to me that this officer simply had the law wrong. Maybe the person that he wanted to call was someone who had expertise in the area.
I would start with going to the office and asking for the permit. If the law allows, record the whole situation.
Be polite, but firm. It only took a couple of minutes for me to find the Sheriff department web site.
Now I saw the second half of the YouTube video. Much is explained. The Deputy may well be wrong about the "paper copy", but he may have a valid issue about a photograph that is not recognizable.
I would not know about that, it depends on specific Iowa law. I believe that he is correct about Sheriff departments issuing permits, but I do not see any requirement for a photograph. That does not mean that there is no requirement, I simply did not see it.
I hope that is helpful. I would not want to put out too much information, I might even take down the YouTube video. You might have a decent lawsuit on your hands, that a lawyer might take on a contingency basis.
Please keep us informed, but be careful what you say.
P.S. I found mention of the wallet sized card on a pdf file called "New Permit Information Effective 1/1/11"