It certainly may be. What the price paid was and what loans / mortgages may be out currently against the property (used as collateral) may be very different prices. The lis pendens is notice to the world that there is an action proceeding that affects title to the property. It's an alert - and good for you that you took the initiative to do further research.
Remember how people were ambitiously taking out home equity loans? That may be the situation here. I STRONGLY recommend enlisting the services of an experienced real estate broker and real estate attorney to assist you in asking the necessary questions so you know what you are getting involved with. Many short sales are already in bankruptcy so proceed with caution and with knowledge.
(I have more information on the subject at my law website if you are interested.)
Good luck!

It depends on the Lis Pendens and what it is for and who filed it. There is also the possibility of a second mortgage that you did not find that would make the full debt over $550K. Also if the seller has missed payments there could be late fees, attorney fees and interest that has accrued against the debt owed to the lender that could contribute to it being a Short Sale. The full scope of the default may not all be a matter of public record depending on your state.