Hello 'queenbee',
I hear ya, I hear ya, - and I can only try to imagine the depth of your frustration.
(Although you have described it most succinctly).
<<Should I just accept terrible customer service, seller's just deciding not to complete transaction?>>
Just accept it? No, and that is why people need to file a claim before the end of 45 days to get
their money back for a no-show item. But this is mail order, and as the saying goes, you cannot
force a seller to ship it to you. All you can do is file a claim.
<<Would any one of us do this in a store you walked in personally?>>
Now where would that store be, - in Canada? It would not be in China, would it. 
I knoooowww you've heard this so many times before, but when buying from China a buyer
needs to be exceptionally vigilant in ensuring the item arrives by the deadline, -- and that may
mean buying well in advance of any 'dates' should there be a problem.
Ordering from that country is fraught with trouble. Of course, you could not have known that
in advance, but life is full of rotten learning lessons. "Such an important purchase" should not,
in my view, have been entrusted to an unknown mail-order seller in China.
You could have saved yourself a huge amount of stress and heartbreak by agreeing to spend
a little more money and buy locally.
At the time you placed those orders you likely had a low feedback score. To a scammer, this
is the signal to not send you the item. The scammer figures you are unfamiliar with the system
and can be delayed past the time when you can file for reimbursement.
Lots of people buy from China and seem to be happy with their purchases. It helps to peruse
the sellers' negs to see if they are systematically ripping off the newbies. You need to know
how to file a claim. And it seems people are happiest if their expectations are not too high.
Items are generally of poor quality, but if a buyer accepts that, - for the comparatively low price
it can be a fun purchase. So even if the dress had arrived, it may have been of a horrendously
poor quality, and too small with no room to let out the seams.
If you do not receive your item you will need to file a claim, with or without a "fraud warning"
from ebay. The reason for the warning should not matter to you. Just get your money back.
I agree that "customer service, trust and ethics" should count for something, but the odds of
getting it from a stranger on the other side of the world are not as good as you might like.
Ask yourself this, since you maintain it should not be about money, -
Was money not a consideration when you ordered your "dream dress" from China, -- were you
not anticipating getting something exquisite for a fraction of its perceived value?
In future, if you insist on buying from China, never spend more than you are willing to
throw away, -- just in case that is what you end up doing.
I am truly, sincerely sorry this happened to you and ruined what should have been a most
beautiful time. 
