What if you create a set for members who canceled in 2012? To do this, I would suggest using your calculation and modifying it slightly:
[Cancelled in 2012 Flag]
if[MbrStatus]='Cancelled' and [Year]=2012 then 1 else 0 end
Then right click on the dimension "Name" (or, probably even better because it is likely unique: Master_Customer_id) and select "Create Set". Use the "Condition" tab and specify "By Field" where the MAX [Cancelled in 2012 Flag] is > 0. Any member who had a cancellation in 2012 will be included in the set, but everyone else had a MAX flag of 0.
Once you've created the set, you can then drag it to the filters shelf to keep only members of the set. That will exclude members who didn't cancel, but will still keep all years.
Thank you Joshua - that was what I needed to do. Really appreciate it!!