Notwithstanding Madrid's attempt to blame Villarreal, the RFEF, Cadiz, and anyone else they could find for their error, the Spanish Football Federation booted Madrid out of the Copa for fielding an ineligible player, and had some strong words for Madrid as well.
The RFEF was critical of Cheryshev for not realizing he was ineligible, stating 'any worker at any company should be aware of their disciplinary situation'.
The RFEF pointed out that Villarreal were duly notified of the penalty and on the same day, it was posted on the RFEF website, where in fact it still is. The club's address is taken to be the player's address for such notifications. It is not up to Villarreal or anyone else to do anything further.
Real Madrid's attempt to argue the suspension was void because cards reset when the round of 32 begins was dismissed as a "forced and flimsy argument based on a limited and biased interpretation" (it's clear to anyone except Madrid that this provision refers to players with teams who have come through the first three rounds of the Cup, and doesn't apply to players on clubs entering the competition for the first time at the round of 32).
My favorite though was the comment that "this case serves to illustrate the laxness sometimes prevalent among clubs of the sporting and financial elite, which boast human and logistical resources that are not available to hundreds of humble, modest clubs that nevertheless are painstaking in keeping track of their suspensions."
Real Madrid, of course, are appealing the decision.