Microsoft also announced the imminent restoration of services via a press release overnight.
As yet, there is no acknowledgement from users that this is true.
For those not familiar with the issue, it would appear that during an upgrade of the Storage Area Network (SAN) hosting the cloud data, a problem arose that led to an apparent catastrophic loss of data.
Initial announcements made light of the problem (aggregated here), but each successive public comment made it more and more clear that the problem was serious.
This will be updated as more information comes to light.