The official explanation is that "relations were good" when they finalized the Peace Drive contract in 2006. These supply-side problems really began after the OBL raid, around the time Obama made the Pivot to Asia move, which resulted in strengthening India and basically relegating defence assistance to Pakistan to COIN only.
The PAF also didn't foresee a long five-year PPP government (in 06), which dried procurement resources. So even the FC-20, which was intended to be the F-16 alternate, had to be dropped.
All that said, the PAF leadership seems to agree that an interim 4+ gen fighter is necessary, and that the "leading options" are in China and Russia. Let's see... J-10B/C, Su-35, Su-30SME and MiG-35?