The plot keeps getting thicker. The USPS person has officially given up. They cant confirm whether the package was delivered or not, as the Indian Embassy wouldnt give them that information. They cant update the USPS online status because its too late, and because they dont have any information...
. All they could confirm was that the package is definitely not with them. They asked me to check for the money order status with the issuing post office, as that is the only way I can now find out whether the Indian Embassy ever received the package and if the money order was ever cashed.
So I went to the post office today, and showed them the counter foil. I thought they would just be able to go to some website and give me the status of the MO. But no, they made me fill a form, pay $5.40 and they are now going to mail that form to some other place where the scanned images of MOs are kept. It gets even more interesting here...they said if the MO was already cashed they can send me a copy with information about who cashed it and when, and if it is not then they will cancel the original MO and send me a replacement MO. I didnt want them to cancel the MO as what if the Embassy received the package but just taking its time to encash the MO? But that's their procedure, and at that point I had no energy left. If they end up cancelling the MO and send me a replacement one, I"ll just apply for a PIO. I can always upgrade it to OCI when required.
Lessons learned - Never use USPS, and never mail your package on a Friday.