The liens that are attached to the property need to cleared, you need to find out the exact ammount of All of them, it could be $100 or $100,000, then you can decide if you wish to move forward or not.
Who is negotiating the short sale? Your attorney? Your realtor? That is the person who should be negotating with the lien holders to get this resolved.
Good Luck, don't give up just yet, these situations come up all the time with short sales and somehow they get resolved almost every time.