Its also a good idea to list open houses on several sites, not just MLS.
Yes, cancel online and put up a sign. Even if you take everything off line, people may not check back online before coming to see the property.
I own properties in the area myself. I've had offers ranging from $25 per unit all the way up to 10% of the gross revenue. A fixed price can be good because you shouldn't have to pay extra money in management fees if you've done a nice job of renovating your properties so as to bring in more rent. If anything, property managers should charge less if everything has been newly renovated as they could expect to get fewer phone calls for repair. However, you always want to make sure to get references and make sure the prospect property manager has the resources you need.
It all depends on the property. If its a single family you could save a lot of money by doing some of your own work, but if its a multi-family you may be required to hire a general contractor to start work. I'd be interested in what you ended up doing.
I'm also a landlord in the area, so I can relate. It sounds like a short sale would be nearly impossible to pull off, but it also sounds like you could benefit from an affordable property management company to get back some of your time and maybe a small rent increase could still keep you at break even. Have you looked into that at all? Or perhaps a creatively structured lease purchase option?
That can get a bit tricky. Were you notified in writing in regards to the AC unit? If so, you should be able to back out of the contract. However, at the end of the day you would have to decide if a renegotiation would be worth the possibility of losing the property.
There are many benefits to renting to section 8 tenants. As you mentioned you're looking for any downsides. The only downside is that unlike self paying tenants, most section 8 agreements will require you to comply with bi-annual inspections, and if the inspectors want you to repair or fix anything, you will usually be given 30 days to comply or you will stop receiving rental payments from the housing authority facilitating payments.