New update:
I will obviously keep updating, but I received an email from 888 and they have confirmed that my funds will be paid out (my account was first at zero - even though I had funds, and then completely deleted).
I was very angry and posted about it, but I have now gotten emails that my funds will be paid out, and I will go ahead and report that now. It will take 6-8 business days for the transfer, but in the spirit of fairness - I bashed 888 in the forum about this - it seems they have come to bat and all seems good.
It looks as if it was not totally 888s fault (although it was very confusing for me when my money was at $0, and the explanation was "Your account has been deleted") but it looks as if it is an issue with the German gambling laws and 888 trying to balance things out.
In any case, it looks as if my funds will be paid out, and I will update as soon as that happens.
But support has actually been great and very, well, supportive after my initial SNAFU. I was very angry and let them know and they obviously saw my point of view and made it good again.
I will update when my funds arrive, but I don't see anything going wrong after the emails I received from 888.