A CRJ200 on short final was given an ATC go around for traffic but while retracting flaps on the go around the EICAS alerted FLAPS FAIL and in addition they experienced an airborne conflict with a departing aircraft.

Narrative

Our last day was almost perfect. The weather was beautiful in area and we were on the visual Runway 31 for the second time of the day. We were south from the initial visual procedure intersection heading north when we observed an Airbus 3 miles level and intercepting the visual approach course. Approach canceled our clearance and gave us a left turn to pass behind the Airbus. We complied; and announced we had both traffic and field in sight. We were then re-cleared for the approach and advised to give 'a little room.' We continued our arrival while keeping a close eye on the traffic in front of us. While turning base; the Airbus had missed their turn and was instructed to proceed to the next intersection immediately. I began to repeat to myself Go-Around flaps 8 as we neared the runway. We turned final as the Airbus cleared the runway. 500 FT stabilized. At this point; I requested that we verify clearance to land; long pause '300 FT'; '200 FT'; 'Go-Around.' I advanced the thrust levers; hit the TO/GA buttons; and said 'Go-Around.' I heard positive rate from my First Officer. 'Sorry; Go-around flaps 8.' He responded 'Flaps 8; Positive rate' I continued 'Gear up; Sp.' DING! Now what? I glance over to see the Flaps Fail caution message. 'Great!' My eyes returned outside and right in front of us was small air carrier aircraft; at our altitude and climbing with us less than 1/2 a mile away. He had just received clearance for takeoff on the intersecting runway as we were landing. We had already begun a slight left turn when Approach directed us 'turn left 20 degrees immediately.' We pass behind the Dash 8 as my First Officer simultaneously announces acceleration altitude; requests an altitude to level off (ATC had not cleared us to an altitude yet); and asked me if I wanted to declare an emergency? 'Standby' I sputter out. The flaps are failed at 27 degrees; my fuel state is hovering around 2;900; I'm 1;000 FT in the air at 160 KIAS; and we pointed straight at tall downtown buildings. 'Yea; declare the emergency and let them know we have 50 people in back.' ATC shoots back with a quick turn to the north over the bay and 100 million questions. My First Officer does a fantastic job running the QRH. Somewhere in the middle; we ACARS Dispatch; talk to our Flight Attendant; finish the QRH; in-range; and approach checklist; and stay very close to the airport. The eventual visual approach and landing was unremarkable. 10 minutes tops. 300 LBS of fuel. Scheduling calls...Now What?