At approximately 1:30 PM (EDT) today, Etsy Admin Sarah A. returned to the Etsy forums with this announcement:
"We have determined that our original definition was too narrow for our
creative community, and that there are other ways to incorporate rocks
and crystals into handmade items. As long as your listings for rocks and
crystals are presented as a craft supply- an item that will be used to
make a new item that you might find for sale on Etsy- they can be sold
in the Craft Supplies category"
Thanks, Etsy! This is great news for hundreds of buyers and sellers!
[Note: The announcement was in response to this issue]