What's worked for me in the past is this:
I have a "Money Order Request" email setup in Shooting Star.
As soon as I receive a request for my address to send a money order payment, I send this email.
In the email, I lay out the steps for money order payment in step-by-step format. At the top I put in large capital letters (Yes, yelling, I know, but it seems to work) that "THESE STEPS MUST BE FOLLOWED OR YOUR PAYMENT MAY BE REFUSED OR RETURNED".
Step one ensures that they get the right money order, clealy laying out the fact that I can not accept "green" USPS money orders.
Step two ensures that they include their ITEM NUMBER (!!) with their payment. Nothings worse then receiving 10 money orders in a day, and 2 or 3 have no item number attached.
The rest of the steps are fairly basic...confirm once physically mailed, ensure postage sufficient for Canada, other common issues, etc.
I word it all very professionally and nicely so that nobody takes offence, and it seems to work - my instances of receiving money orders that I can't cash, or that I can't match to an auction (Due to lack of an item number!) has dropped signifigantly since I instituted this email system.
As for those cashing the green USPS money orders in Canada, I'd sure like to know how - the USPS will NOT honour these money orders (even from a bank!) outside of the USA. If a Canadian bank is cashing them, they are either getting stiffed on the payment once *they* try to cash it, or they are clearing them through a US division of their bank. I've been down this road a hundred times, and once a bank gets stung once, they usually smarten up and outright refuse the green MO's.