That's certainly an option that will be looked at if they can't revive the probe in time, but it might be tricky. That would just about double the expected mission lifetime. It's tough to say that the mission-critical hardware (batteries, most importantly) will still be serviceable in 18 months. The rapid day/night cycles of earth orbit put a lot of strain on electrical systems from constantly switching power supplies.
The location/position of the probe has been known almost from the beginning. It was never that they couldn't find it, the problem was that the booster pack that was supposed to send the probe on to Mars never fired and the probe wasn't responding to the Russian's radio commands. What has changed in the last day is that receivers here on Earth are finally picking up radio signals from the probe itself, indicating that it is still alive and at least theoretically operational. Telemetry hasn't yet been received, but now there is a possibility we can communicate with it and try to diagnose the failures it suffered. As for if it can be recovered, I've not heard a definitive answer on this. One source will say the window has already closed, another says it's open until sometime in December. The window can probably be extended if they have enough fuel to try some exotic gravity assist with the Earth or Moon, but if it hasn't already passed it will soon.