Hi there - your domain had been set to auto-renew, and we do send out at least six reminders before the renewal goes through, as a heads-up. Is it possible those were being sent to spam and weren't getting through to you?
Canceling a domain after 2 days of purchase means you completely give up ownership of the domain. There is no guarantee the domain will become available to re-register after cancellation.
You are welcome to keep your domain liquid-gossip.com with us and update the nameservers to point to another hosting provider by following this guide:
http://en.support.wordpress.com/domains/change-name-servers/
After 60 days from the date of purchase or registrant contact information change, you may also transfer your domain to another registrar.
http://en.support.wordpress.com/domains/transfer-domain-registration/
If you would like to completely cancel your ownership of the domain name, please reply to confirm and I'll be glad to take care of it for you.
Once you've removed any domains from your site(s) you can delete them by following these instructions: Delete Blog
Auxclass has given you some good advice as well.
If you need any further help, just let me know.