It sounds as though the whole thing is out. The people at Mayo didn't think it was a melanoma at all--moderate dysplasia means different things to different pathologists, but what it does not mean is melanoma.
I'm not sure what you mean when you say,"our 2 in-town pathologists as a dysplastic nevus vs invasive malignant melanoma." Do you mean that one or both of them said they thought it was or could be malignant melanoma. If they are general pathologists, I would feel quite comfortable going along with experts at Mayo and just watching it, as your doctor suggests. If the pathologist who suspected melanoma was a skin pathologist, you may want to request that the slides be sent for another opinion to a melanoma pathology expert. Slides are portable, so getting another opinion is easy.
Quite frankly, though, you already have a very reliable opinion that it wasn't a melanoma, so it's unlikely that you'd find out otherwise even if you choose to seek another opinion.
Take care.
Dr. Rockoff