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They advertise a 99.95% EC2 SLA. Does that mean that an instance in a single AZ can go down anytime for any length of time?

Anytime but not any length of time.

99.95% SLA means the following amount of downtime: Daily: 43.2s Weekly: 5m 2.4s Monthly: 21m 54.9s Yearly: 4h 22m 58.5s

But in the context of ec2, downtime must occur in two AZ at the same time to count IIRC. There is no single AZ SLA.