I had a similar experience. Between all the back and forth it took me about 4 months when getting the merchant account for Genius Pool (http://geniuspool.com/). For background, this site is not meant to make a ton of money -- I just wanted a job board as an option for the podcasts I do.

I tried to get the merchant account set up while building the site. When I tried my bank (BOA), they wanted a fully functional site before they'd think about looking at an application. That wasn't going to work since the site wasn't done yet.

I went with TrustCommerce for my gateway and the rep there referred me to someone for the merchant account. He had me do an application and submit it. After a week or two he said they needed "marketing materials" like a brochure and flyers. I made some marketing materials and let him know the podcasts were the primary marketing materials. Application denied due to marketing materials.

Next he said he could try a different processor. I go through the whole application process again. It takes many weeks during which I keep getting emails back needing some other piece of documentation. During this time I had contacted Braintree who said they could approve me with X,Y, and Z, and it would take about 7-10 business days to get me all set up. They were very explicit about what exactly I needed. The only downside was that it was going to be a relatively high minimum every month.

I told the first guy to cancel the application and then it was approved if I still wanted it. Plus all setup fees would be waived. I went with them because fees were lower as were monthly fees.

However, I wish I had gone with Braintree. Their service was top notch and I wasn't even a customer. If I knew I was going to be processing at least their minimum I would have gone with them. With that said, my current setup works and I've been very happy with TrustCommerce.