Are you allowed to refuse the 3-2 payoff for a Blackjack and treat the hand as an 11 and double?

I was playing blackjack recently and witnessed the following: A player at the table got a blackjack 21 and the dealer did not have 21. The dealer then started to pay the 3-2 on his bet, but the player said he didnt want the 3-2, and instead wanted to treat his hand as an 11 and double his bet. The dealer and pit boss didnt know what to do - they initially said he couldnt do it, but they really didnt know for sure. The player demanded to see a rule book, and the casino couldnt readily find one. The casino then let him double - the player lost his bet, and the game proceeded.

About 15 minutes later, someone at the casino produced a rule book, read the "rule", and claimed that doubling on a blackjack is not permitted, and they shouldnt have let it occur.

So, my question is not "should" you double a blackjack - I assume it's sheer lunacy (excluding some pathological situation where the remaining cards are virtually all 10's, or possibly in a particular tournament situation), but rather "are you permitted" to treat a blackjack as an 11 and double it? Does the answer vary by state/casino?