I would do this:
1. document well what you are about to do and why. Police reports or reports from the HSA custodian would be welcome in case anyone ever asks.
2. Choose option 2 - the distribution was used by qualified medical expenses.
I say this because it is the "least worst" solution. Option 1 is likely to cause the IRS to send you a letter wondering where the 1099-SA that they got a copy of is. Option 3 would cause all sorts of negative effects on your return, like additional income and penalties.
Option 2, at least, doesn't hurt your return (much).
3. I say "much" because if you are trying to enter unreimbursed medical expenses into Schedule A, note that TurboTax will be subtracting the amount of your 1099-SA distributions from whatever you entered on Schedule A, thus understating your medical expenses. The way to work around this is to enter a Miscellaneous Deduction in Schedule A for "HSA adjustment" and the dollar amount of the 1099-SA(s), so as to offset this. NOTE: if you don't plan on filing Schedule A anyway because you will take the Standard Deduction, then don't worry about this.
4. Your statement that your distribution was used for qualified medical expenses is likely true, even if you weren't making the expenditures. The reason is that the cards for HSAs are often coded to be used for medical expenditures, so that you can't use the non-medical stuff anyway (although I am sure there are ways around it). So maybe your thief was buying OTC drugs and stuff which would qualify. (not something you need to worry about)
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