The listing agent did not even respond to my offer and presumably "lost" it among the pile of dozens of offers she received.There are lots of unscrupulous agents out there who will pressure the buyer to accept a lower offer if it means more commission for them. 

They said they could lend the lower of 90% by the purchase price or 85% of appraisal value. 85% of appraisal value is approx 4K less than 90% of purchase price, so now I have to make up the difference. 

Or do I just hope and pray they let it go, since their due diligence is a short timeframe?

Instead of the seller paying her commission, it could be used to lower the price or used as part of the down payment.

However, I've already been told by conventional lenders that I am not likely to qualify since I'm self-employed, thus my income on paper is lower than normal.

@Libby BaugherBecause you can’t get rid of them easily and mustwait out the time frame .

Recording fees4500 buyers agent commissions 500 warrantyprobably more I am forgetting to write down ...is there anyway to lower my closing costs ?

Rob Auction.com typically starts off high but if there are no bids, sometimes they will run a second round at a lower price a few hours later. 

Obviously more money down would mean a lower mortgage amount, but at the same time less money down leads to a higher CoC return.

That area is close to the bases and has lower cost properties, but vacancies would remain low as long as we have all these bases in town!