Money held in the queue, is it safe if Ratesetter folded?

The only money shown in the queue that you will be unable to withdraw is money that is pending to be 'rolled over'. It's already matched to your borrower, and is effectively just being continued to be lent out - there's no way to cancel that lend order.

It's poorly displayed as it seems to suggest you should have access to each chunk at the next repayment date, which is not actually the case and probably just a hangover from how RS used to work.

So your c) is actually really just more b) money. Once the system catches up it'll disappear from the queue. 

edit: you normally might not even notice any money there, but I assume they're working through the backlog after the Easter holiday in this case, so things are slower than normal.

Are you sure its bee re invested ? Remember RS changed the way the rolling/access account works about 18 months ago.
So it seems like all the money is paid back and then re lent - However this is incorrect, its just how RS have programmed that account. 

IF it's been re lent, an easy fix to stop this happening again,  go into your reinvestment settings and change the reinvestment rate to be a lot higher than the market. I use 6%. So when you money is paid back, it goes to market at 6% and then I manually cancel those orders, and withdraw the money