For forgiveness, at least 75% must be spent on payroll. Rent,  or mortgage interest and utilities also count.

No one knows yet "What kind of documentation would be required to show that the loan proceeds was spent on "owner compensation replacement? A canceled check marked "withdrawal"?"

Yes you are correct that less than all of it could be forgiven. Simple math -borrow 2 1/2 months payroll. Forgiveness = two months payroll.

It's not your fault this blew up. Please stick around.