A letter posted today on the Blizzard Web site confirmed that battle.net has indeed been hacked, and some player characters have been abused, killed, and ripped off by hooligans unkown. Blizzard aplogized for the inconvenience this caused (and no doubt a few heart attacks, strokes, and embolisms as well) and has offered to rollback all the effected characters, restoring them back to the way they were before the evil crackers got ahold of them.

Here is the official word directly from Blizzard Entertainment:

During the past week, some players have experienced character losses. Instances have ranged from hardcore characters dying, to the loss of items, skill points and experience in normal characters.

As of this morning, we can confirm that the problem causing these losses has been fixed. We recognize that the loss of a hardcore character or unique items is a cause of great concern to players. To remedy the situation, we are taking the following steps:

1. Monday, January 8, we will be reviving all hardcore characters who died between December 19th and January 1st. The restored hardcore characters will be revived with the experience, skills and items possessed as of Tuesday, December 19th. This restore will be automatic and players do not need to contact Blizzard to request that their character be restored. Note: Only dead hardcore characters that died between December 19th and January 1st will be revived.
2. In the event that players believe they have lost items, skill points or experience, we will be providing a mechanism by which players can manually flag their character to be restored as well. The restore will occur on Monday, January 8, and will rollback characters to the way they were saved as of December 19th. Please check this forum on Wednesday January 3, where we will be posting information on how you can flag your character to be included in the rollback.

We apologize for any inconvenience or frustration that this problem may have caused players. We believe that these solutions address the majority of losses that have occurred. Please contact support@blizzard.com if you have any questions or concerns.

Thank You,

Blizzard Entertainment

"Hope this didnit ruin your holiday, and thank the Blizzard Gods for being kind enough to make amends.... Happy New Year"