Amy, terminologies and practices can be different in different parts of the country.
In the local West Palm Beach market, "pending" typically, and according to the MLS rules, means that the "major" contingencies have been removed. For example, inspection, mortgage approval, and any other special conditions noted in the contract have been completed and accepted by the buyer. Usually all that remains is the closing, and leading up to that, some routine title work, buyer's survey, and final loan processing. And a lot of packing and notifying in preparation for a move.
We have a separate status "contingent" meaning the property is under contract for purchase, but subject to contingencies such as financing, inspection, etc.
Not knowing the nature of your contract or any special clauses regarding the short sale, you should check with your agent and/or an attorney. It's important for your agent to be in touch with the buyers and their agent and they should provide you with the status of that lender's approval. If you're getting stonewalled, have your agent contact the listing "broker of record", or seek legal advice.