The Defense Logistics Agency, the DOD logistics support agency, has decreed that all fired brass sold off by US Military will need to be mutilated (ie. turned in scrap brass). thanegrooms @ ar15.com has been keeping a forum thread updated with news about this unfortunate development. From an email he received:

Please take a moment to note important changes set forth by the Defense Logistics Agency:

Recently it has been determined that fired munitions of all calibers, shapes and sizes have been designated to be Demil code B. As a result and in conjunction with DLA’s current Demil code B policy, this notice will serve as official notification which requires Scrap Venture (SV) to implement mutilation as a condition of sale for all sales of fired munitions effective immediately. This notice also requires SV to immediately cease delivery of any fired munitions that have been recently sold or on active term contracts, unless the material has been mutilated prior to sale or SV personnel can attest to the mutilation after delivery. A certificate of destruction is required in either case.

One fired brass military brass being auctioned. Will now require mutilation.

The NRA is aware of the situation and are hoping to have a waiver put in place so that fired brass .50 and smaller in caliber will not be required to undergo mutilation.
Follow any new developments here.

UPDATE: I pulled this blog post pending confirmation due to concern this was just a misunderstanding concerning existing rules/regulations and I did not want to alarm anyone. Unfortunately this is not the case. Andy Byers sent me a twitter message to say that Georgia Arms have confirmed it. From their website:

Due to new government regulations concerning the purchasing of surplus brass, we are removing sales of all 223 and all 308 until further notice.

UPDATE: Cannoneer has more info and links here.