The headache is over--I'm just rows away from finishing the front panel of the Crisp Rectangle Tunic Top! I got halfway through it before I finally wrapped my head around the instructions and had to rip it out. Once I realized what I was doing, it was a quick knit--about three days. Unfortunately this is one of those projects I'm really looking forward to wearing and not really enjoying the process of. It's not bad, though, it's just that I have to be really paying attention to it, remembering what row I'm on and all that.
The business with the short rows got cleared up when I started to think of the short rows as part of the row they occur on. So for example, at the beginning of the pattern, it says to knit the first six rows flat, without short rows. Then, on the seventh row, which is a WS row, it calls for a 30 st "hip short row." So row 7 includes not only the wrong and right sides of the short row, it also includes the full WS row that follows the short row. So when you flip it over and are on the RS, you're knitting row 8.
I don't know if that makes much sense, but I suspect if you're in the midst of the mind-scramble that is the Crisp Rectangle Tunic Top, you just might get it. I just thought I'd try to articulate that idea in case it could help others who are working (or might later work) on this project.

On a lighter (and clearer) note, I've absolutely loved working with this rich brown Debbie Bliss cotton dk, which is absolutely not dk weight at all. I got gauge with the size 7 needles that the pattern calls for, though I'm pretty sure the Cascade Pima Tencel that the pattern calls for is worsted weight. I'm really enjoying the morse code stitch pattern; the improvisational aspect of this knit really makes up for the tedium of counting rows.
I can't wait to start the back panel and the finishing and the WEARING of this knit!