It's official: Rabbi Chaim Amsalem has been disowned by Shas. You can see the letter at Kikar Shabbat, written and signed by Rabbi Ovadia Yosef. He is referred to in the letter as Mr. Chaim Amsalem sans the title "Rabbi". What's more, Rabbi Amsalem's mentor Rabbi Meir Mazuz added his signature saying, "We have already revealed our opinion that we have no portion and inheritance with him". It must be quite painful for Rabbi Amsalem to see such a letter!
Shas has requested that Rabbi Amsalem resign and return his mandate to Shas, which he is required to do according to a written agreement that all of Shas's candidates had to sign. Rabbi Amsalem refuses to do so.
Where will he go from here? As long as the present Knesset does not dissolve itself, his career as a politician is not over. Does he have enough support to form his own political party, one that can pass the threshold of votes to make it to the Knesset? I doubt it. All of the sympathetic talkbacks he is getting on Israeli web sites won't help him on election day. His only hope is to join another party that will be willing to guarantee him a high place on its list to the next Knesset.
His views on the proper relationship between learning Torah and supporting oneself seem to jive with those of the Jewish Home (formerly National Religious) Party. However, I think that Rabbi Amsalem has greater ambitions than joining a small party and sitting in the shadow of Zevulun Orlev. He would be a fool to join the critically ill Labor Party. That leaves the Likud, Yisrael Beiteinu or Kadima. My guess is that he will opt for the Likud. Time will tell.