Hold a Press Conference. Put up big blow up pictures of various Iranian "secret" bunkers, Presidential Offices, Secret Police HQs etc. Tell them they have 12 hours to turn the sailors over to us or the UN or we are going to destroy each of the building listed. 12 hours after that, we will start hitting the personal homes of each of the Mullahs, commanders of the Revolutionary Guards, Defense Ministers and other leadership cadre of the Iranian Govt. Remind the Iranian leaders that if even one hair on the head of even one sailor is mussed it will be considered i a war crime for which they will be prosecuted in the same manner Saddam was.
Why didn't we bomb North Korea after they seized the USS Pueblo? Should Bush have threatened China after our recon plane was forced down and the crew held?
Unfortunately, this thing was waiting to happen, and the UK is unprepared for what is necessary, due to their savaging of Tony Blair. Blair has no teeth, and this is HIS fight, with respect to his soldiers.
Now, a US rescue mission would be a great wound healer, but the resulting death of any of the hostages would make matters worse. The US is blamed either way.
Here is what is going to happen: We will wait a period of time, while through back channels, warnings will be issued much line what you mentioned about a press conference. Iran will attempt a face-saving measure, release video of the 'confessions' then release the troops as a show of 'peaceful understanding'.
Bush should not let this happen, we should attack the bastards TONIGHT. But, we wont.