Hm. I imagine you should fill out the form and the agent at the post office will calculate it for you. Really not sure of the rate but... yeah, not good, eh?
Good question. I believe if the return postage is covered (first class and express classes usually are), they return it and FT will give you a refund (maybe). But I am pretty sure with things like this, they destroy it. I think you've got 14-30 days.
I have no idea if there are consequences other than that. I doubt there is. It may be best to go talk to the post office anyway and if the price is too high, just tell them. I'd think this is a common occurrence, since the tax is damn high.