I would recommend you not put all of your eggs in one basket...keep looking and when you locate another possibility indicate to the initial seller you are ready to move on and explore other options. Actually, you can make that disclaimer now....
The "Eckler Team"
Venice, Fl 34285
Do you want the house? Do you believe that a short sale is priced at 10% above what the bank will take? What is the status of your offer? How often is your agent speaking to the listing agent? Perhaps the seller is trying to make your offer look better to the bank by lowering the price, thus lowering the percentage that your offer is off.
If you want the house and you feel (supported by comps provided by your agent) that $530,000 is a good price, I would stick with the original offer. If you don't really want the house, stop wasting everyone's time.
Best of luck,