Hopefully someone with more practical experience with domain names will jump in with more information, since domain names have their own peculiar wrinkles in the law, but I'll try to start you off with some basic trademark principles. (And I am assuming that they had their website up -- or at least were using their mark in commerce -- before you began your blog.)
It's a common misperception that registering a trademark with the federal government is how one gets trademark rights. In the US, trademark rights are developed by use, not by registration. Registration strengthens those rights and makes them easier to enforce. So the fact that they haven't got their mark registered yet doesn't mean they don't have rights.
On the other hand, it doesn't mean they do nor, if they do, that they have the right to stop your use.
The issue for trademark infringement is "likelihood of confusion". You say that their site is very different from yours. For a trademark analysis, you need to look at it from a consumer-of-services point of view, which may lead to the same conclusion you reached, but possibly not. If the subject matter of your blog and their goods or services would be considered in the same "channels of trade" (or appealing to similar groups) then similar names might cause confusion. Which means you have to look at the names. (And note that having an extra word or syllable won't necessarily make your name not "similar" to theirs.)
The fact that your "xyz" is descriptive of what you write about is important. While this means that your own trademark rights in the name could be weak, it also means -- at least as far as trademark law is concerned -- there could be a strong argument that you should be allowed to use the name.
As a matter of public policy, we don't want the law to keep people from being able to communicate about their goods or services, so there are some limits to what sorts of names can be protected as trademarks. Generic names are absolutely not protectable as trademarks -- if they are applied to the thing they are. (I cannot have "Apple" brand apples, but can have "Apple" brand computers.) Descriptive names can be protected, but they have to be used long enough to develop what is called "secondary meaning"--namely, the mark has to be used long enough for the consuming public to recognize that that particular description of the product or service is used by one particular company.
As I mentioned, there are some peculiar wrinkles for domain names. As I understand it--and I may be wrong--in the absence of trademark infringement, a company must have a famous mark to begin with if they are to force out another domain name, and for that the standard is a somewhat tweaked version of "likelihood of confusion" having to do with whether people will hit the "infringing" site instead of the famous one.
It sounds like this company is playing an intimidation game with you -- particularly since they tried to buy you out a couple of times first. This makes it sound like they don't have much of a leg to stand on. (Although, perhaps they have sufficient rights and just didn't realize it then... not likely, but possible.)
If you are serious about holding onto your domain name, and it sounds like you are, it would be good for you to consult trademark counsel with whom you could lay out the details. This could be a Canadian attorney who knows US trademark law or an American trademark attorney.
To minimize the cost of consulting counsel, however, you'll want to inform yourself as much as possible ahead of time. The US PTO website has some information. There are also a number of US IP law firms that have online articles about trademark and domain name infringement. Past threads here, too, may be helpful. The more you understand what evidence will help you, the more you can dig up yourself to show to the attorney. Gather evidence of such things as your first date of use, the other guys' claimed first use (in their trademark application available on line), how you use your site, how they use theirs and what their products or services are, their prior correspondence with you, etc. Having such proofs in front of him or her, counsel will be better able to give you a judgment as to where you probably stand and what they can do for you. You may only need a strongly worded letter from counsel to get these guys off your back. But if the practicalities of fighting it look too expensive, you'll want to know that, too.
PS Don't be shy about asking attorneys about their billing practices up front. Check with several and compare. Also ask about whether they've handled similar situations individual clients like yourself, and how those turned out.