So why doesn't the Sills family ask the Bishop to request that the Pope order her admitted back into school. Benedict seems like the type who would do this just to send a message to the vindictive liberal nuns.
And besides, aren't they talking about "pruning" schools with weak Catholic identities? This seems like a good place to start.
The pope's a busy man - he generally doesn't get involved in individual disputes. This bishop has a couple of options - he can essentially ignore the expulsion or he can warn the Loretto sisters that they are in danger of being kicked out of his diocese. I suspect the good sisters already feel unwelcom and are pricing properties in LA or some other liberal diocese.
My guess is that the bishop's involvement in this case is over. As much as the bishop would love to kick some Loretto butt, it's just not good administrative policy to be so heavy handed or to be known as a micromanager. Let's hope the bishop starts working on building some conservative high schools in his diocese.