My final GPA and the possibility of rejection after getting conditional offers

Hi guys!
I am writing from Tokyo, Japan. I received a conditional offer from the University of Cambridge on February 1st and have successfully met 7 out of the 9 required conditions.
However, I am really worried about one of the remaining conditions—my final undergraduate GPA. The required GPA stated in my offer is 3.8, but my final GPA is 3.55, which falls slightly below the threshold.
Today, I received a message from the Admissions Office stating:
“Thank you for providing your academic document. Your academic results do not meet the academic condition of your offer. We have forwarded it to your department/faculty for their consideration and we will update your self-service once we hear back from them.”
After this, my application status changed to: Awaiting approval by the Postgraduate Admissions Office.
I have already submitted a formal statement explaining the reason for not meeting the academic condition.
I would be very grateful if anyone could let me know: Is there still a chance that I will be rejected based on this?
Thanks

There is a chance, yes. However, if your status had previously been at PAO, went backwards, and then forwards again to PAO, it suggests the PAO sent your grade details to the Dept (the backwards step), the Dept considered and still recommended you (the forward step to PAO again).
What usually happens in these circumstances is that the Dept waits until they have a good idea is the course numbers are going to overshoot or undershoot, and if undershoot, accept the nearest of near misses. But alternatively, they can simply make a case to PAO that for other reasons they think you are worth giving a place. Sometimes it takes a little longer to progress because there's some paperwork to complete to justify accepting a near miss, but it usually goes through.

Thank you so much for the kind response!
So, you mean that it’s not 100% guaranteed, but there’s still a good chance I’ll be accepted. And Since my status currently says “awaiting approval by PAO,” does it mean the department has already responded to PAO, and now the final adjustment or review is underway ?

I can't know for certain, but presumably it said that before all this happened, and your post implies it reverted to some other status, and then recently returned to the PAO status. Logically, that implies the Dept have already gone back and said they want you regardless, and PAO are just getting the written reason for that from the Dept (Depts are notorious for thinking they just say what they want and it happens, whereas PAO are notorious for wanting original paperwork, in triplicate, and signed in blood). I'm making a lot of assumptions, based on my experience of going through this quite a few years ago.

Thanks for answering my questions in detail.
Actually, just a few hours ago, the Higher Education office sent me an email saying that Professor Nidhi Singal (the department chairman ) would like to interview you on Wednesday 11th June at 9am UK time via Zoom. This interview will last approximately 20 minutes. No preparation is needed. The aim of this interview is to understand your motivation and readiness for the programme…..
I’m going to do my best but I’m extremely nervous and upset.
Is it enough for me to prepare Review of my submitted application documents and the course module, and Review of the academic work and publications by my prospective supervisors??