#1) READ YOUR CONTRACT
#2) It is likely that you signed away your right to a trial, and elected Arbitration. It is also likely that your realtor did not explain to you the difference or the implications.
#3) If the agent has not obtained a written lender approval letter, you do not technically have an accepted contract, and you should not have opened escrow (there are some situations where you would open an escrow). If 50+ days have passed already, don't believe that the agent will wave a "magic short sale wand" over the negotiator's head, and that you'll have approval by May 2nd... Countrywide has multiple levels for the offer to continue up the chain -- and they work at their own pace. Ask any other buyer -- they will likely tell you the same thing.
#4) I find it hard to believe that you unknowingly performed a physical inspection, etc., without the written approval(s).
#5) Contact the agent's Broker immediately (leaving a message tonight), Sign a Form WO, and withdraw your offer. Look at it as an excellent (but unfortunate) lesson in real estate. be sure to get back the signed cancellation.
Stay calm, and stay in control. You deserve a better experience. Good luck!