I can't believe how many sellers, both in the forums & in Etsy-related FB groups, are saying that they're going ahead and shipping orders so their reputation doesn't get tarnished.
My last Etsy order was the one I mentioned in the 1st post, so I've not had to really deal with this mess yet. If I were to receive an order from a repeat customer, I might consider shipping it before payment has cleared, but not for a first time customer; no how, no way. I'm pretty sure that shoppers could cancel payment by contacting their CC company and, if the order had already been shipped, the seller would be screwed.
Many payments started to get processed late yesterday, but new DC orders were still getting stuck for at least a few hours.
Good idea to NOT use the Etsy card reader for the time being.