Hi Claire-
Unfortunately, there are so many people in foreclosure or short sale situations that it's difficult for the negotiators to get to all of them in a timely fashion or as timely as we all would like them to get to them. I know it's no excuse.
These type of sales take an exhorbitant amount of time. If you are patient, they will close, if you are not or can't afford to be, (either you need a house NOW, or you wish to not wait), your question on earnest money depends on the dates. I know you gave dates in your post. However, I am confused by them to be able to give you an appropriate answer. So, here is the general real estate answer.
If at any time the seller is unable to satisfy a contingency, then the buyer's earnest money would not be in jeopardy. The seller would be in default of said contract.

However, Since you are in Virginia and I am in Illinois. I'm not sure that this holds water for you.

Hope this helps!
Honestly, I would contact your attorney to gain local advice and perspective.

All I can say is...Thank God we live in a State who uses attorneys for real estate transactions. I'm curious as to what your attorney told you because I have some concerns for you, yet I wouldn't get to worried yet.