On a short sale, however, most agents don't have their clients even open an escrow before they have the lenders involved approvals. It sounds to me, like the agents may still be negotiating for that actual approval. Also, in a short sale, there is a possibility that other buyers can overbid earlier ones, and the lender actually jumps to a higher bidding buyer.
Hopefully this isn't the case, but it does sound a bit suspicious. Do you have your own agent, or are you dealing with the listing agent of the property.
Here's a thought, go onto my free MLS search website, linked below. You can not only search for other houses, as you've asked about, but you should be able to check the status of the house you're in escrow on. If it says that it is still available, "A" status, you're probably in a short sale.
Good luck in finding the right answers.
The underwriter with your bank is looking out for your best interest and theirs. And since the extension keeps going on, she needs to make sure nothing in your life has changed, like job, new debt, credit etc. With REO's banks need to satisfy all previous leins on the home like water, sewer, trash, electric, contractor work, taxes, permits, everything. Sometimes there are circumstances where there is difficulty with those leins getting amounts due or insurance claims in process. Your title company would be handling all of that and negotiating with the bank to get them paid at closing.
If you are in a need to move in by a certain date, have your agent draft a early occupancy agreement. This shows the bank you are still interested in buying the property but the delays in closing aren't feesible for your current living situation, like your rent is up within 2 weeks and you already told your landlord. If anything, ask your agent to pry information out of the title company of why there are so many delays and have them be your advocate on getting this closed in a timely manner.