It's simpler than all that, really. If we consider the metric
-(1+gz)dt^2 + dx^2 + dy^2 + dz^2
We know that ##\partial / \partial t## is a timelike Killing vector, because none of the metric coefficients depend on t. We also know that any killing flow generates a born-rigid flow
http://en.wikipedia.org/w/index.php?title=Killing_vector_field&oldid=627685256
Killing fields are the
infinitesimal generators of
isometries; that is,
flows generated by Killing fields are
continuous isometries of the
manifold. More simply, the flow generates a
symmetry, in the sense that moving each point on an object the same distance in the direction of the Killing vector field will not distort distances on the object.
In other words, distances don't change as we move from the past to the future along the timelike Killing flow, which is just the property that we want for an object to be Born rigid. We want a set of points that maintain a constant distance from our reference observer and also each other. We further presumed our reference observe is a static observer hovering at a constant height above the black hole.
Thus for a static observer, the time-like Killing flow generates a notion of distance which is equivalent to the "ruler distance".
The metric is especially simple in this case, because the spatial coefficients are all unity, so the coordinates represent spatial distances directly.
The remaining argument is just that for a sufficiently large black hole, the Riemann curvature tensor is small (i.e. the tidal forces, properly defined, are are not important), so that the above metric (which has a zero Riemann curvature) is a good approximation to the more complex black hole metric. If we really wanted to go through the trouble, we could compute the actual time-like Killing flow of the Schwarzschild metric and use it to determine the distances for a static observer without making any such approximations.
Because a time-like Killing flow exists, we can take advantage of it to generate a Born rigid flow. Since the flow is non-rotating, I don't believe we can require that a Born-rigid flow must be generated by a time-like Killing flow, but we can certainly take advantage of the existence of a time-like Killing flow to generate a Born rigid flow.
If we ask for the notion of "distance" that an infalling observer might have, I don't believe we can find an appropriate Killing flow :(. This doesn't mean that a Born rigid flow does not exist, but it does means that we need a different technique to find it.