Yea it sucks your dealing with CL and not Facebook or you probably would have been acquired.
I say try and move the traffic to pad. It's certainly a big task, but not "far too big". Pick the region where you have the most significant traffic and start there. I haven't looked deeply into your site at all, but I know you have Garry Tans support, ask him what you need to do to get in YC. Get "Craigslist is the Killer" as a headline on TechCrunch. Piggyback the Padlister browser add-on with other common downloads, then push a popup to users posting apartment listings on craigslist saying "Also list on Padmapper?" There are all sorts of things you can try.
I think if you look up "network effect" in the dictionary, it's going to talk about Craigslist. Good luck overcoming that.
A great strategy here would have been to establish a strong relationship with the people at Craigslist from the beginning. No idea if that was tried or not. Seriously, was the C&D letter the first communication exchanged between Padmapper and CL? What a missed opportunity. I wonder if this entire disaster could have been averted by calling the CL guys up early on and taking them out to lunch. Make friends, send them Christmas cards, then when this disagreement comes up you handle it over a round of golf instead of a C&D letter.
I say try and move the traffic to pad. It's certainly a big task, but not "far too big". Pick the region where you have the most significant traffic and start there. I haven't looked deeply into your site at all, but I know you have Garry Tans support, ask him what you need to do to get in YC. Get "Craigslist is the Killer" as a headline on TechCrunch. Piggyback the Padlister browser add-on with other common downloads, then push a popup to users posting apartment listings on craigslist saying "Also list on Padmapper?" There are all sorts of things you can try.
There are hundreds of people on HN that wish they had the traffic you have. Use that momentum before it dies off. http://siteanalytics.compete.com/padmapper.com/