full_solution.rb

class User < ActiveRecord::Base
  validate_on_create :referrer_must_be_existing_user
...
  def self.find_valid_referral(username)
    case 
    when username.blank? then Elder.first(:group => "distribution_count ASC").user_id
    when !username.blank? && self.exists?(:username => username) then User.find_by_username(username).id
    else nil
    end
  end
...
  protected
  def referrer_must_be_existing_user
    errors.add(:referral_id, "is not a valid user") if referral_id.blank?
  end
end #User

class EarlyAdopter < ActiveRecord::Base
  def self.increment_distribution_count(user_id)
    find_by_user_id(user_id).increment!(:distribution_count)
  end
end

class UsersController < ApplicationController
...
  def create
    @user = User.new(params[:user].merge(:referral_id => User.find_valid_referral(params[:user][:referral])))
    if @user.save
      redirect_to root_path
      flash[:notice] = "You're awesome."
      Elder.increment_distribution_count(@user.referral_id) if params[:user][:referral].blank?
    else
      flash[:error]  = "Woops!"
      render :action => 'new'
    end
  end
...
end