Update to my previous answer: Just got an e-mail from Oregon Association of Realtors summarizing legislative action in the 2011 session, which just ended. A portion of the summary read:
"The Oregon Legislature unanimously supported House Bill 2916-Enrolled, which will protect sellers in the short sale process. This legislation precludes further collection on deficiencies in a short sale when a 1099-C is issued in connection with the sale, allowing sellers to make a more fully-informed decision when they sell. This legislation was signed in to law by Governor Kitzhaber and is effective as of June 23, 2011."