Sorry, but if you are to prevail against TfL you must be prepared to stand your ground and take them all the way to London Tribunals if necessary, and forget the discount option which is the pathway to the "Mugged Club".
Reading your narrative it seems you have a reasonably strong case. Yours is not the first case we have seen on here where a person drove into the ULEZ, and decided to not just pay for that particular entry, but to set-up an Auto-pay account, assuming that in doing so, his ULEZ payment for entry before the account was set-up would be covered. Unfortunately it only works going forward, but you have identified some TfL text that would seem to indicate otherwise to a person setting up an account. So I'd say submit those draft reps and see what TfL come back with and post it here. Your actions in setting up the account show that you intended to pay for ULEZ entries, and not avoid payment. If TfL have any sense of fairness in their organisation, they should cancel the PCN and ask you to pay for the day in question.
However, see what others say, but don't miss the deadline for paying or submitting representations.
