Tom Williams,
You better come up with %100 of everyone's bitcoins ASAP even if you need to buy them with your own money from one of the exchanges.
Those bitcoins are YOUR responsibility.
I can think of times in my life where I made mistakes, and paid tens of thousands of dollars out of my own pocket to make things right.
Now it is your turn.
Do the right thing.
This x 1000.
If he's not incorporated, he can be sued for his personal assets and cash by anyone and everyone who lost bitcoins from this. I encourage people to take this route once more of his information is revealed, and if he does not fully reimburse every single person who used the service.
Direct from MyBitcoin's Terms of Service agreement. You agreed to it when you signed up, so too bad.
8.1 While MYBITCOIN LLC will make every effort to ensure the MyBitcoin System is accessible at all times, MYBITCOIN LLC makes no representation that User will always be able to access the MyBitcoin System or the User's User Account and User agrees that MYBITCOIN LLC will not be held liable for any loss or damage, whether direct or indirect, resulting from the use, operation or performance of the MyBitcoin System and/or the Bitcoin Network other than as a result of the deliberate or negligent acts or omissions of MYBITCOIN LLC.