I have recently recived a few orders for tshirts that are still marked "Pending" in the order process. However, the image just got flagged as "pending" because it went against the CUP. Since these orders have been paid for, will they still be printed and shipped to the customer? or will a refund be issued?

Most likely CP will cancel the order. I'm pretty sure they explain it to the customer via email.

You'll get a better answer by contacting CP. HERE is the contact form.

Actually, they were produced! It was only 3, and they were all shipped out.

I've had that happen if they were in the printing buffer.

If CUP freezes an image while an order is "new," it won't get shipped.

Rarely, I've gotten a CUP email while the order was "production." That order did ship.

I once had a baseball team order 50 baseball jerseys. The team got the jerseys in spite of the red border around the image. They won't get anymore, though.