If the sale is a short sale, the present owner is still the "owner of record" and someone that you must deal with before presenting your offer to the lender. It's only after the owner agrees to these terms and conditions that it goes to the lender for their consideration.
If there is an agreed upon offer in the hands of the lender it's highly unlikely that you will be able to be recognized as a possible consideration until the offer under consideration by the bank is terminated. With short sales it's also common for several offers from different buyers to be submitted on the same property over time before the lender decides to accept an offer.
Our recommendation is to have your agent be in touch with the listing agent and make him/her aware of your interest. Should the deal fall through(and many do) having the agent notify you immediately may place you on the inside track.
If your offer was not considered, you should move on. There's not much you can do even if you suspect something odd about the current accepted offer. Then again, the seller has to sign an affidavit that the sale was an arm's length transaction. So, unless the seller's agent wants to take a chance with his license, I doubt there's anything illegal about the transaction.