This is a big issue and entirely frustrating.  The government agency that sets the conforming loan limits

The economic stimulus bill passed by Congress in June this year temporarily increased the conforming loan limits for 2008 to help spur lending to homeowners.  The problem now is that the limits are set to return the prior levels of $417,000, or 1.15% of the median home price in so called "high cost areas".  The problem is the definition of "areas".

The National Association of Realtors is strongly urging Congress to make the 2008 levels permanent as part of an overall housing stimulus package.  This helps for sure, but still does not solve the problem of local high cost areas.

http://www.ofheo.gov/media/cll/HighCostLoanLimits2009.pdf