There really is no clear answer at this point since the blacklist is relatively new and there are not a lot of people who are on it. If you tried going back to your country and apply for a Z visa there and you get rejected by the chinese consulate because you have been put on the blacklist you can try and find jobs in other countries that are more worth your while. China, while big and developing and seemingly brimming with opportunity as hyped up by western media including many books you'll find in the biography/geography/travel/current issues sections of your local bookstore is actually pretty overrated. Going as a tourist will give you a generall better experience as you will not have to experience the many irritances and annoyances of daily life that eventually float to the surface over time if you did work there.

The blacklist in my opinion is just a tool for the chinese government to present itself as the authority for anyone, foreign or local to go to in order to resolve any and all disputes. It is meant to intimidate expats and make them fearful of consequences of crossing the "wrong" people in china. It really is having the opposite effect that it intended as instead of respecting the country more one would lose an good will after being possibly put on it. This is especially true when you are dealing with businesses that have a vested interest and just want to exploit teachers as commodities but because of the close ties (in other words BRIBES and GUANXI) that the government has with them any conflict which results in the expat teacher leaving automatically hands the verdict over in favor of the business. If the school or "school" was the one abusing the contract and the teacher just left it wouldn't be judged fairly as the "school" or school should be the one to pay the contract fine and apologize to the teacher. In the end what looks like a fair law on paper is just another government tool that abuses and oppresses the truth and leaves expats holding the proverbial bag. It can also be read as a poor attempt by the government and businesses to exert Sino superiority and the imposing of the will on teachers it deemed as carrying out actions which threatened its state of balance. Although how much of a revolution expat teachers can cause is beyond me.

I do sympathize with Luke's situation, and I think what's really tying him down is the emotional and financial investment he made into china. Just keep in mind that one can make their own free choices and let some things go. The world is open enough to hold one more teacher.