I am also confused. I see a couple potential issues:
1) If the school is refusing to release your transcripts, then you owe money directly to the school. Have you verified with the school that they will not release your transcript, or are you assuming? If you have not verified this with the school, call them. Schools do not normally refuse to release transcripts due to SL default (they've already been paid), but they DO refuse to release transcripts if you owe THEM money, even if it's a very small amount like a library fee. If you do owe the school money, it might have nothing to do with the SL. To resolve it, call the school and find out what you owe and how to pay it. Once you've paid, they'll release your transcripts.
2) Are you sure that the SL was a private loan? If you went to your school's financial aid office, I'm sure they would have advised you of federal loans. There is a website where you can look up your federal SLs - I'm sure someone here can tell you the exact website, or try googling 'national student loan database'. If it is a federal loan, it can be rehabilitated. There is a lot of info here on the rehab process.
3) If it is a private loan, does it appear on your CR? Or your dad's, if he cosigned?