I know short sales can be a nightmare but if you feel you have found the right home for you, don't give up. If you think there might be something better (and homes are coming on the market daily), then have your Buyer's Agent keep a look out for something that might be better and maybe is not a short sale.
I recently had a buyer in a short sale that looked like there was no way Bank of America was going to get the deal done. They kept countering and wanting the buyer to put up some money. The seller refused so after another month, the bank came back asking for 4 times more from the seller! Does that even make sense? So we figured the deal was dead and at this point we don't know if the tax credit will be extended or not so I found another property that fit my buyers' needs. She loved it - thought it was better than the one she had been waiting for and made an offer on that one. Two days later, the bank, after 3 months of countering with offers that could not have been met, accepted the initial offer with a closing date of 10 business days! That, of course, is impossible when the buyer is getting a loan. So, once again, the bank put a wrench in the process.
So, bottom line, the bank loses, the seller loses but the buyer wins in the long run.
You never know if a short sale is going to happen until you get the final letter of approval. So hang in there if it is the home of your dreams and, eventually, you will probably be able to get the deal done. But keep your options open as there just might be something better out there.