Cancel operation does cancel on the Google side but I encountered a problem restocking backordered inventory and received a flash "error" message and the order state did not change. Email still came from Google though saying it was canceled.
We need a new model that extends Payment. It should behave similar to creditcard and have a transaction history. Upon notification of a new order we should create a pending payment that can then be "charged." We should also handle situations where order is automatically captured (create in correct state automatically.)
If user is logged in, the order should be associated with them upon return. I think the problem with the current logic is that there will never be a current_user associated with the Google notification. The best we can do is associate before the checkout or after we return.