The novelette ballot was harder for me to come up with than the short story ballot because I came into my reading with three PodCastle-produced novelettes in mind as being among this year's best, and it was difficult for me to find ones that I felt were as good or better.
I am genuinely excited by the five I found to nominate, though, and I found a number of other very good novelettes along the way. I was most excited by Paolo Bacigalupi's "The Gambler" as a single piece -- but the real trove was Eclipse 3, which provided a number of strong-to-excellent novelette length reads.
I used the same reading process as for short stories, except I also went through all the novelettes available on the SFWA boards to pick out stories by authors who I've enjoyed in the past. Very few people seem to be using this resource -- the download numbers, even for popular authors, are low.
For full disclosure, I have two novelettes that are doing well in the Nebula nominations so far -- "A Memory of Wind" and "Eros, Philia, Agape," both up at Tor.com -- so this is the category in which my objectivity is most suspect.
"The Gambler" by Paolo Bacigalupi, Fast Forward 2
"The Ships Like Clouds, Risen by Their Rain" by Jason Sanford, Interzone
"Good Boy" by Nisi Shawl, Filter House
"It Takes Two" by Nicola Griffith, Eclipse 3
"Useless Things" by Maureen McHugh, Eclipse 3
"Narrative of a Beast's Life" by Cat Rambo, Realms of Fantasy*
"The Curandero and the Swede: A Tale from the American 1001 Nights" by Daniel Abraham, Fantasy & Science Fiction*
"The Nalendar" by Ann Leckie, Andromeda Spaceways (Nebula elligible due to PodCastle publication)*
"The Pretender's Tourney" by Daniel Abraham, Eclipse 3
"Sleight of Hand" by Peter S. Beagle, Eclipse 3
"Truth and Bone" by Pat Cadigan, Poe
"Dragaman's Bride" by Andy Duncan, The Dragon Book
"Sinner, Baker, Fabulist, Priest; Red Mask, Black Mask, Gentleman, Beast" by Eugie Foster, Interzone
"A Journal of Certain Events of Scientific Interest..." by Helen Keeble, Strange Horizons
"The Magician's House" by Megan McCarron, Strange Horizons
"Lion Walk" by Mary Rosenblum, Asimov's Science Fiction
"Errata" by Jeff VanderMeer, Tor.com
"The Mathematics of Faith" by Jonathan Wood, Beneath Ceaseless Skies
*Stories that would have been on my ballot if not for PodCastle publication
**"First Flight" by Mary Robinette Kowal is still on my reading list -- she's declined eligibility for the Nebula this year, but I intend to consider it for the Hugo.