Hi,
Thanks for your question. Yes, it is possible to activate the Fair's ability under these conditions. There are steps to casting a spell and activating abilities (and activating abilities mirror the rules for casting a spell), and in 601.2e, we check to see if we're allowed to activate the ability. At this point, you still have three artifacts in play, so you're allowed to activate the ability. A bit later on, in 601.2g, we get the ability to activate mana abilities, and at this point, you get the ability to activate the Ironwork's ability to sacrifice the two artifacts to generate the mana to pay the cost to activate the ability. After 601.2e, we don't check again to make sure we can activate the ability, so it doesn't matter at this point that we've dropped below three artifacts.
601.2e The game checks to see if the proposed spell can legally be cast. If the proposed spell is illegal, the game returns to the moment before the casting of that spell was proposed (see rule 721, “Handling Illegal Actions”).
601.2g If the total cost includes a mana payment, the player then has a chance to activate mana abilities (see rule 605, “Mana Abilities”). Mana abilities must be activated before costs are paid.
But as for your first question, I am not aware of any shortcut that defaults to “you are assumed to be activating mana abilities during the announcement of the spell rather than before the spell”. There's nothing in section 4.2 of the Magic Tournament Rules (the section about Tournament Shortcuts) that mentions that. Of course, you can always communicate to your opponent what you want to do (“I will activate the Fair's ability, and during announcement, I will sacrifice these two artifacts to generate the mana to pay the cost”).
As for your second question, that's covered by this rule in section 721 (hinted at above):
721.1. If a player takes an illegal action or starts to take an action but can’t legally complete it, the entire action is reversed and any payments already made are canceled. No abilities trigger and no effects apply as a result of an undone action. If the action was casting a spell, the spell returns to the zone it came from. Each player may also reverse any legal mana abilities that player activated while making the illegal play, unless mana from those abilities or from any triggered mana abilities they caused to trigger was spent on another mana ability that wasn’t reversed. Players may not reverse actions that moved cards to a library, moved cards from a library to any zone other than the stack, caused a library to be shuffled, or caused cards from a library to be revealed.
So yes, you would undo mana abilities that were activated during announcement (provided those mana abilities didn't do things like move a card from your library to your hand, like the mana ability from
Chromatic Sphere).
Thanks,
Nathan Long
Magic Rules NetRep