What would you do if you were me?
A blog post with judicious images of their boilerplate emails, incredulity about how they seem to repeat the same thing over and over, a timeline, a punchy title (I kind of like "Grand Theft Google" but you could dial down the tabloidism several notches and still be effective), and seeding with a tech audience will work pretty well.
^^fixed that for you.
We have one of these threads it seems every week. Across their entire range of products, Google is pretty hostile to their users the second something doesn't work correctly. The only way to get any help besides their bullshit automated responses or forums is to have enough web traffic to embarrass them into helping you. Eventually Matt Cutts or someone else will swoop in, but if you can't find the right place to publicly bitch or don't have enough traffic, they clearly don't give a shit less.
I've seen it personally enough so that I'm no longer integrating any more of their products into my life. What happens if eg you get google voice, give everyone you know your google phone number, and something breaks? I don't run duckduckgo nor do I post on the front page of techcrunch so I will simply be SOL...
I have customers who spend $200k+/yr on adwords (pennies in Google's eyes) and barely get their own adwords rep.
I'd actually turn my whole front page into a giant protest, and bank on my customers (roughly 2,500 of them if I did my math right) to help with the cause. I'd be up front with customers about my issues with Google Checkout, show a timeline, efforts made, and documentation (what you CAN show).
If you're truly in the right, and you truly jumped the hoops in proper form, then you have the goodwill and Google's cooperation to gain. Keeping in mind that your customers are iPad users, I believe they've shown in the past that they can be a pretty supportive and loud group of people.
Alternatively, not knowing what you've factored in as costs and how thin your margins are, I would look into authorize.net, braintree, and that beta program that was on here yesterday as other options for taking in payment. It looks like with the volume you're likely to do, it will pay to just absorb 2-3% in costs than deal with this issue constantly.
The second will definitely cost you more, but you may see the money sooner.
Only you can do the cost/benefit analysis.
1. Send them a letter with the tracking numbers.
2. Make the customer service rep give me his direct e-mail and phone number (extension) so I can send a copy of all the tracking numbers and keep calling him back to ask for an update, every single day.
3. I'd buy a plane ticket to California and visit them in their office, face to face, with all the proof inside an envelope with me.
This is 120k we're talking about, I'd do quite a lot to get all my money. Currently I am dealing with a company that owes me 5k estimated, maybe a bit more, and they're paying me $300 a week in small amounts and it's really pissing me off. I've already moved to a new company to work with, that is reliable and have been so far, but I really hate when shit like this happens.
Best of luck to ya :)
Also, shoot me an e-mail (in the profile). I know a couple unemployed architects in the SF area that used to work in woodshops. They might be able to help out.
Is it something that is hard to do ?