An update on this story. It appears that the city of Coeur D'Alene has backed down. Eugene Volokh has details here. The city attorney has decided that even being for-profit does not subject the Knapps to the non-discrimination ordinance.
But I want to back up for a minute to the "tempest in a teacup" claims and the "misrepresentation" claims. As recently as October 20, in an attempt to quell the alarm about the Knapps' business, the city actually implicitly affirmed that any for-profit wedding performance business is subject to the ordinance! The city attorney wrote a letter implying that the Knapps' alarm was unjustified since they are a religious corporation, but he apparently assumed that, if the Knapps' business is religious, it is also non-profit. (Shouldn't a city attorney trying to quell alarm do somewhat better research of the facts on the ground?)
Moreover, I see in Volokh's reporting, a complaint was brought against the Knapps for their "discrimination," just as they feared it would be, and the police did make contact with them about the complaint! So the phone call requesting same-sex "marriage" services was indeed followed by a complaint against them. Everything was proceeding on oiled wheels to try to get them charged with discrimination. Just precisely as they thought. I note that this was the point on which critics were implying that conservatives were overreacting--whether there was any actual threat of prosecution.
Now, it appears that the city attorney is stating that they cannot be prosecuted after all because their business is a "religious corporation," regardless of whether it is for profit or not.
So all's well that ends well? Well, if you happen to be running a registered "religious corporation" that performs only religious services, and hopefully if you are a minister performing weddings in your own church, even for a fee. If you're just a baker or a florist, not so much, as we all know.
But even as regards "religious corporations," let's be clear: All would not have ended well if the pro-active route had not been taken. Let's hope that the facts are not lost here: Events were proceeding toward a prosecution of the Knapps for violating the non-discrimination ordinance. Public pressure and a lawsuit forced the city to...er...research the matter and to decide that they should not prosecute. The best defense is still a good offense.