So I get a a order for a textbook. I follow the rules and send her multiple e-mails, "I can't send till you consent to accept the text "as is" with highlighting and underlining." No reply. So I don't send it.

When this times out, am I the one the gets the Dreaded Black Mark on my Permanent Record because I didn't mail it in a timely manner?

And does the book just go back on my shelf?

If the book times out, it will not go back on your shelf.  I would recommend canceling the book before it times out and typing in the reason for canceling as "No Requester Response regarding highlighting".

I agree with Mary S. 

A cancellation here and there doesn't count as a black mark against you.  They don't monitor accounts that closely.   It would only be an issue if you habitually cancel transanctions. 

I actually had this same exact situation just this week.  I posted a WL book that a family member used in a class, so I PMed the requestor about whether the very slight pencil writing in the magins and one page of highlighting was OK.  Received no reply by the requested date--which was today--so I cancelled the transaction.

When would you suggest that I try posting the book again?  There are 24 other people on this WL and I would like to get the book to someone who wants it, rather than it sit here collecting dust.

Not a black mark at all.  If you sent the PMs from the transaction box, they're attached to the transaction and are a perfect explanation of why you canceled. 

If the requestor ever replies and doesn't want the book, you can tell her that you'll cancel, and also try asking her to set up a "no writing" requestor condition.  If she is willing to do that, you can then repost the book, and before she accepts it, she can turn her RC on (in My Account --> Settings.)  Then you can decline her RC.  This gets you past her to the next wisher, and she keeps her place in the WL line.  She can then turn her RCs off.

If you don't hear back from the requester, I would send a second message explaining the situation (including the 24 WL line) and ask for them to reply back within the week.  If they don't then send feedback to TPTB, it might even be a delinquent account.  I haven't done this here, but did over at SwapADVD, and it worked well there.

Actually, I believe now there is an option to skip a wishlisted book. So the person wishing could choose to have the book skip her that one time.

A RC won't work, because she would have to cancel her WL request and re-request it in order for the RC to stick. and that would put her back at the end of the line.

What Mary said

And if they reply and do not want the book, try Patty's suggestion.  Ask if they will assist the members behind them by adding an RC briefly.  You can cancel, they add the RC, you repost and decline the RC, the book is offered to the next member.  Or maybe they could put the book on hold for a couple hours?

If they do not reply, it's worth trying trucker's suggestion.