"If CPA recommends using a 1099 for owners compensation for a single person s-Corp, is the CPA liable for this mistake?"

There was a whole year to make it possible to catch this error before getting to the 1120-S, though.

"If owners comp is listed on 1120 line 7 and then on schedule C, how is this classified?"

Well, 1120 is a C Corp, not S Corp. Sched C is for someone who is Not employed by the corporation, but performing as their own business providing services to the corporation.

Someone needs to backup, redo everything, and make it right. Not try to figure out how to make it Worse.