I wouldn't say end of the world, but you are absolutely correct about the plausible situation where there are no buyers of maturing short term debt.
Jbog is correct in saying that the Federal Reserve would need to buy a good portion of these new Treasuries. They have done this immensely in the past few years without allowing the public getting any details. They would have to pay for bonds they can't afford...in other words, forced to print more money.
The USD is down more than 50% across most currencies since it's high (including vs the Euro, even though the Euro took a beating). Printing more money would be an escape to a collosal collapse, but it will not go unnoticed. When this occurs, I would expect double digit yearly inflation until the gov't cleans up its books. Some of this occured during oil's rise to glory (total inflation, not core inflation)and stalled in the past 2 years. Steam should gather within 2-3 years and inflation should ramp up in 3 years and lasting from 2013-2017.
It sounds drastic and thee unthinkable. Lets not forget that we also once thought that Citi, AIG, etc were bulletproof 3.5-4 years ago.
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