China Geeks has a nice analysis of the possible role played by security management funding in Chen Guangcheng's imprisonment:
As Chen himself notes, his imprisonment has created hundreds of well-paying jobs for local villagers, not to mention plenty of opportunities to make money on the side (I’m sure all those guards get hungry). As Chen also explains, anyone above the bottom of the guard organization is probably making additional money on the side by skimming from the money that’s handed down to pay the guards.
In other words, there’s an economic impetus for many people in the village participate in and perpetuate the imprisonment of the Chen family. And in a small farming village, the difference between 50 RMB a day and 90 RMB a day can be enormous. It’s no surprise the Linyi authorities haven’t had any trouble finding guards or — as far as I’m aware — met much resistance from villagers in the surrounding area.
But the village economy is small potatoes (figuratively) compared to what it sounds like the Linyi officials have done at higher levels. Within the Linyi budget, it seems the folks tasked with “maintaining stability” have been able to draw huge amounts of money to fund the Chen family’s continued imprisonment, and it’s doubtful anyone there is interested in seeing that budget shrink again. So, in addition to the legal risks associated with releasing Chen Guangcheng, many officials may also be worried releasing Chen would result in massive cuts to the local stability maintenance budget.
And as CG points out, some of that would be kicked back upwards to officials in Beijing, thus completing the circle.
Obviously a runaway budget is nowhere near the whole story. But If Chen's imprisonment had become a pillar of the local economy, that would explain the indifference and hostility to him from local villagers found by Murong Xuecun when he tried to visit Chen last November. It might also explain something else. Chen took the breeze for five days before he was discovered missing. Maybe some of the lads weren't in any hurry to stop picking up their per diems.
As per Chen's current whereabouts, it's still not been confirmed that he's in the US Embassy in Beijing, or indeed has already flown to the US, which is the latest hot rumour. It's also been rumoured that, being a Christian, he may be under the protection of the house church network in Beijing.