Jim, Other gurus PLEASE HELP URGENT!!

[H1B-Woes]

I was laid off on Dec 31st and I got a new offer. The company filed a H1B transfer on 14th Jan 2002(RD 16th). I started working for the company immediately. Mean while the previous company cancelled my H1(officialyy INS cancelled it on 27th FEb). Now the new H1B has come thru but without a I-94.Actually my lawyer got two notices on asking me to go Madrid,Spain and one asking me to go tochennai(India,which is my home country.)The lawyer says it is a INS mistake since in both notices it wasn\'t mentioned that the change of status or extension has been denied.(The INS assumed it to be a new petition). My company attorney has filed an appeal with the INS and he also said that I cannot work currently until the appeal is resolved. Am I out of status?Am I accumulating overstay? If the INS does not grant a change of status ,does it mention that in the approval notice. Pleas advise!!