First, what is up with all this G and US Gov non-sense: G doesn't work with the US government, that you can be sure of. Just think for a sec: the US gov. (just like the Chinese one) doesn't need anyone to work with them. If they want some info, they just fish it under the radar without anyone ever noticing (except for China which got cough only once with a hand in the jar, fishing info form big corporations this winter)
Second, this is a big problem for G: they need a technical solution that will ensure that their apps will work everywhere in the world. Otherwise the cloud desktop will never pick up. I think the solution needs to be web-based and easy to use. Something similar to a open-proxy, but ran from G for accessing their apps only.