Please let me know if you are in need of outstanding agent referrals in Aspen. All the best to you!
I think this link may help answer some of your questions: http://img.pr.com/release-file/0905/151627/forcvsshort.pdf
A lender and friend that I trust very much tells me that he knows of quite a few homeowners who used the following program: http://www.naca.com/refinance/refinanceTenStep.jsp
Chapter 13 has been what some people that I know have decided was the best solution for them.
Many people find that Short Sale is best for their situation. There's not one perfect answer, you need to explore the options and of course talk to an Attorney and decide what works best for you.
I hope you find your answer and that a year from now everything will be looking good again. If a Short Sale is your best option, I know of a couple of very good Realtors in Aspen that can get you through it as painlessly as possible.
The Kinslow Team LLC
Coldwell Banker Residential Brokerage
I would consult your tax attorney or accountant on that one. In California there are laws that protect you from tax issues due to a short sale. BK can best be answered by an attorney.