Please have a look to this sentence:
Nach dem Spiel wird Norbert klar, dass es sein letztes war.
My teacher marked letztes and said that Letztes is correct. Nevertheless, I think letztes is pointing to Spiel and therefore written in lowercase.
Who do you think is right?
To make it short: You are right, your teacher is wrong. Also your argument (it points to »Spiel«) is correct.
This is the official document for German orthography:
http://rechtschreibrat.ids-mannheim.de/download/regeln2006.pdf
Read § 58 on page 64.
One of the example sentences is:
Es waren neun Teilnehmer erschienen, auf den zehnten wartete man vergebens.
