I wouldn't say it's blown over as it's just hit SFScope today (the 7th), Locus and the Guardian on the 6th, and the blog post itself seems to date since at least the 2nd. I don't do Facebook, so I can say how long it's been going there, but it seems to just now be hitting some of the larger genre outlets and even "mainstream" media.
I also can't agree that "winning's winning". If the voting system failed and/or manipulations took place then it's a fraudulent award. If enough manipulations took place, then more people did not vote for her or would not have without those manipulations. But I agree with you on her handing back the award (I don't know anything about her but just speaking generally): she either won it fair and square and should keep it or she didn't and, while I don't know who'd do the taking, it should be taken away in some fashion or another. Her giving it back seems kind of bizarre in either scenario. Either she's giving back something rightly earned and initially appreciated or she's trying to end controversy where there vitally needs to be controversy.
Incidentally, why are all the media reports about the novel? Wouldn't she return the short fiction award she also won if she was returning the novel award?
On Telos, I've never heard of them but I have to say that winning the six awards out of the six you're up for and about the only ones you could possibly be up for, including all three fiction form awards, means you're either the best publisher ever or something's weird.
Like I say, these are all real people and there are real socio-political things going on here and I don't mean to imply anything about that. Just saying how it looks to an outsider: not good. There's still been no comment (that I saw in any of the stuff I was linked to) from the main guy in question. Seems he should really say something if only to insist everything's fine and to try to persuade any onlookers of that.
Anyway - I'll leave it to more knowledgeable folks to make of it what they will.