Colorado Goldfields Inc. (fka CGFI)

[Chips]

I have to admit that I am not any sort of expert on short sales but, as far as I know, you are correct on all counts including the fact that or any sort of short sellers are caught with their pants down in such a situation because they don't really have shares - just borrowed ones that actually belong to someone else.
So they have to be exchanged for new shares to the actual owner.
Which means - the shorter has nothing.
This assumes that shorting happens using "borrowed shares" like my Zecco shares that I can't sell without a "paper transfer" that costs more than the stock is presently worth by far. So Zecco can "lend" them to someone else at their risk I guess.
I was also under the impression that there is a time limit on shorts where the the stock has to actually be transferred - which is something like a week so if a 20 day halt happens AND all of the shares have to be paper transferred (re-issued as new shares) during that time, it would seem to be a shorter's nightmare.

One other idea I had was that the "panic selling" due to the R/S that has been happening on the part of some longs to get out before the R/S may be playing into the hands of any who need shares desperately to cover - holding the price down at .0001 - due to a large supply of real shares that are being made available at the "bail out" price.