I agree that it sounds like the foot valve needs to be replaced. The quote of $5,000 sounds outrageous. I've had very good luck with Dalmik Well Drilling (they service Eastern CT) and if you call them at (800) 922-6220 (Linda or Mike) you can confirm if the original quote was reasonable or not.
Home maintenance items are recurring and something that needs to be expected. I regularly post about homeowner maintenance on my blog ( http://www.gardenrealty.com/MyBlog ) and there's some good info there for you. Unfortunately, most older homes don't have warranties like new homes, so the cost for repairs will likely be yours.
I hope this info helps and best of luck since home ownership should provide you with a more positive experience and pride in ownership.
Greg Hanner, Broker, REALTOR, e-PRO
30 year old house with improperly secured studs? I am sorry but it sounds like it made it 30 years.
If you bought a house that is 30+ years old, you bought some troubles too.
Floor joists are not normal items for a DISCLOSURE; unless you knew that they had "first hand" knowledge of them.
It sounds like you and your Inspector did the best you could.
At this point, it would seem that you have limited choices.