I wasn't aware you simply couldn't level above the cap. So sorry about that.
That said, the rest of your reply just boils down to "You're SOL, go restart your hours of progress".
First of all, this could be entirely avoided. Simply don't enforce this rule on OT Pokemon that are obtained prior to the update and are above the level cap while still preventing them from leveling up until they are below the cap again.
If that is too much to ask, have an option to level down Pokemon that are above the current cap. So players can atleast continue playing with their current character as it is intented from the update onwards.
And you say to just create a new character. But we still can't delete characters so this means we have one wasted character in a semi-soft locked state that just wastes space. And for me, I already have used all my slots to play with friends (that got tired of the game by now) assuming I could always just delete these. Which probably are all stuck with the new level cap in the same way. So I have to create a new account just to restart again.