Update
I had sent e-mails to just about everybody at the consulate several times since they received my passports for the OCI stamping on 12 May (without renunciation form or USD 175). To my utter surprise Mrs. Pushpa Kumar called me this afternoon and said the follwoing:
1. The renunciation form and required docs have to be submitted in triplicate along with USD. Their hands are tied and they cannot waive the USD 175 fee (sure, party with our hard earned money!)
2. As per the rules, the form should be mailed to the consular section but since my passports are already with the OCI section, the docs should me mailed to her attention at the OCI section
3. She will handle it from there and send my docs and the Indian passport to the consular section, get the renunciation certificate and cancelled Indian passport from them (will take 2 weeks with no way to expediate due to the heavy burden - try and work sometimes for a change!), stamp my US passport with the U visa and send everything (in one envelope) back to me within 1 week of receiving it from the consular section (total 3 weeks)
4. Since they have already received the mailing fee an additonal amount of USD 20 is not required for mailing renunciation certificate (how considerate!)
Overall, she was very nice to speak to and considerate and suggested #3 above when I insisted that I have my tickets booked to visit my mom in India and cannot go back and forth between internal departments with paperwork and lose time in that process.
Ok, have to rush to the post office on my way home and send these docs...
Timeline:
OCI dispatched - 29 Mar 10
Received at CGNY - 13 Apr 10
[Travelled out of the US]
Mailed Indian and US passports - 11 May 10 (Express mail)
Received at CGNY - 12 May 10 (USPS says item was signed for by M MANISHA)
Call from Mrs. Kumar - 14 May 10
Renunciation paperwork + USD 175 sent to Mrs. Kumar - 14 May 10
any comments from others who spoke to Pushpa Kumar???