Is it possible?
I sort my 2D meshes so I can achieve true order independent transparency. But I want instancing too... The problem is that you basically have to draw all of your meshes that use one type of geometry at once, so I suppose by default the two cannot be combined.
Is there a way to make this work?
Not in general. You could have a situation where the correct sort order would alternate meshes or materials so that you can't both batch similar things together and keep them in the correct order.
BTW, sorting isn't usually considered to be "order-independent transparency" - the reason you sort is because the blending is order-dependent and you're explicitly putting things in the correct order.
To use batching / instancing with transparency you'd probably have to use a "true" OIT method, such as depth peeling, A-buffer, adaptive transparency, stochastic transparency, etc.