Is it a viable enough scenario to make it plausible? I'm not a BTC holder, so I'm curious as to how easy the market is to "prop up" in short term panics like this.
As for how well that would go, well the UK government tried something similar once:
For instance, buying 16.6K BTC on Bitstamp would move the price to $2000. Selling the same amount would move the price to $360.
If no one is willing to buy a bitcoin for $700 right now, there's no reason to think anyone would be willing to buy a bitcoin for $700 even if you were offering $2000 for any bitcoins on the market. Of course people aren't rational and you might catch out people ignorantly trying to follow a graph they don't understand.
This is in part why it is irresponsible for exchanges such as mtGox to report a single "price" for bitcoin, they should always report the current prices as a tuple of (Offer, Bid) prices.
No, it's not. They are reporting the price of an actual trade, where buyer met the seller. At that point the spread is effectively zero.
In reality all three should be reported together when one is as they are all very important.
Just because there's a buy bid at $700 for 1BTC and a sell bid at $703 for 200BTC, doesn't make these two prices equivalent or equally important.