Unfortunately, this is a common question in the Residency Forum here on SDN. You might want to read the following threads:
Program directors are charged with deciding whether residents are promoted or graduated. No matter how selective the admissions process is, some people fail at each step (i.e. some people fail out of medical school, some out of residency, some out of fellowship, etc). As there is no uniform test / assessment of competency, all probation / termination assessments are subjective, and subject to interpretation and abuse.
If you have been terminated unfairly, what can you do?
Follow the grievance process as defined by your program / GME office. Each program must have a grievance process, although what it is and how it is structured is completely up to the program. Often it includes an "independent" review, but this usually involves other PD's, people in GME, etc and there is concern about how independent it truly is.
Hire a lawyer. Most of the threads linked above suggest getting a lawyer. Although it's your perogative, it usually doesn't help. Programs are held to "Academic Due Process" which is a very different concept than Employment Due Process. Programs are legally held to following their own written policies -- as long as they do that, there is not supposed to be cause for legal action. You usually do not have the right to have a lawyer present at a grievance process.
Contact the ACGME. This is guaranteed to be a dead end. The ACGME and RRC do not get involved in individual resident / program issues. You can report your program to the ACGME if you think they have violations, especially around duty hours, but this will not fix your probation nor get you your spot back.
Contact the NRMP. This is not a match issue at all, and they have no standing in this issue.
Doesn't my contract promise me a spot for a year? No, it doesn't. Most contracts include a clause saying that they have to give you XX months notice if they will "not renew" your contract -- i.e. if you will not be given a PGY X+1 contract next year. However, you can be terminated for poor performance at any time and with minimal notice, as long as the rules as stated in your contract / housestaff manual are followed.
Sadly, your choices seem limited:
1. Activate the grievence process and see what happens.
2. Find a faculty mentor / advocate at your program.
3. Hire a lawyer. Expensive, and may not work, but it's something you can do that's under your control.
4. Try to convince your PD to help you find a new program.
Regardless of the outcomes of #1-3, your long term prospects in this program seem dim. You don't trust them anymore, and even if you force them to continue your training, it's going to be difficult. In the end, convincing your current PD (or other faculty at your institution) to help you find a new program is probably in your best interest.
I would love to hear other people's input into this type of situation.