Only (1) is 'correct', as a very casual idiomatic expression for 'what is the problem with the orders?', 'what is the status of the orders?' The subject is, I suppose, 'what', in this case-- and I know you can find the verb, since there is only one.
(Another member may have a different opinion re the subject.)
The subject is underlined, and the subject complement (i.e., the nominal predicate) is in blue:
What is the problem with the orders? (Singular problem) What are the problems with the orders? (Plural problems)
The cook died is the problem with the orders. The cook died and the kitchen is on fire are the problems with the orders.
We know the subject complement 'the problem(s)' has been omitted because the phrase 'with the orders', an adverbial phrase, neither renames the subject (i.e., functions as a nominal predicate) nor adds info about the subject (i.e., functions as a predicate adjective).
Q: What is with the orders? (Means, Why is the order late?)
A: The cook died is with the orders. (Not OK)
A: The cook died is the problem with the orders. (OK)