Obama Nationalizing 401K - implications

[buell]

I have caught wind of a rumor that Pres. Obama may convert 401k's into some kind of government bond or annuity as a way to grab some funds for the nations debt...(do a google search if you don't believe me.)
So I've come to this incredible resource - Serbinski - to ask the knowledgeable folks what is ACTUALLY going on, and what implications it has for a Canadian resident who has a 401K in the United States. I did not see any other posts on this topic so I think it may prove prescient for a lot of Canadians, like myself, who have a 401 K in the US.

My Story:
Approx. $25,000 - 401k
CDN Resident/Citizen (Not a US citizen or US visa holder)
32 years old

Assumptions:
1) Willing to leave the money untouched until retirement age 59, but I'm growing increasingly weary of the financial turmoil in the US and worry about confiscation;
2) I know nothing very little about TAXES in Canada or the US....thus, all observations are appreciated;
3) I cannot move the 401k into an IRA/Roth because brokerages won't deal with me as a foreign resident (damn I wished I knew about conversion before I left) - or at least I don't think I can convert!
4) Right now I'm starting to think it makes sense to collapse the 401k and pay the penalty -- HOWEVER, I'm a student and don't have much income right now to apply for the Foreign Tax Credit.

Thanks in advance for all credible information or general observations ... you've got my attention!