"I got accepted to the Kent literature PhD, but waitlisted for funding. (Really, Kent? I've been teaching there for two years and have an awesome GPA. Basically, the department's way of saying, "Only one prof does what you want to do, and no one else cares about you, please go somewhere else, but if not, we'll take your money, kthx.")"
Amryfal...
I too am in the same boat as you regarding KSU's lit program. Again, like you, I got in...and didn't get funding. I received an email from the DGS last night: apparently, of the four fellowships they were able to offer, two of them went to people already in the program. I have two Master's degrees, very good GRE scores, etc...so, yeah, I certainly understand your last sentence above. I'm not going to go there - but I'm also out-of-state, so the tuition would not be worth it.
The other piece is that my specific email to the DGS was to ask if I might be able to get funding next year, assuming excellent progress, etc. This was when she told me about the above two students, but she kind of made it sound like they were in the heightened realms of literary excellence already. So, no, I'm not going to go. If you're really bound and determined to go this year, go and pay out of pocket. But I wouldn't. Like you said, they think you're smart...but not enough to fund you.