PMI insures the seller's lender's losses up to a certain point (if in fact this is what you're referring to), that being so, the PMI can affect the outcome of the already approved short sale. The fact that your agent hasn't encountered this before doesn't sound too reassuring, and I am not dismissing the fact that a great outcome has been achieved thus far, because if you're addressing these issues at the 11th hour, is precisely at the delicate point where when push comes to shove, someone may wind up having to do something more, e.g., sometimes the players try to get someone else, the agent(?) to leave a little more money (from the commission) on the table. It isn't that the PMI is stalling necessarily, but if they have issues with the appraised value, you may be in for another round of the rollor coaster ride you've been on for as long as this has been going on. Good luck!