The main denial comes from the Vatican spokesman, but is supported by the experienced view of a former U.S. ambassador to the Holy See (who acknowledges he is not in the know of the specifics of this case).
I have to wonder a bit if there are some semantics being deployed, though. A source I trust and who is in a position to know told me that "at least two" names informally floated by the administration to the Vatican were indeed nixed.
Still, the CNS story makes the important point that Obama has not yet filled many ambassadorial posts to countries that are probably a lot more significant to his foreign policy. It is hard to believe that the State Department already would have dedicated the resources to propose three people for this post.