You could negotiate further however you are better served to walk away. Who knows what may happen in the process with a less than upfront seller.
Good luck in finding your new home!
Your agent should talk to their agent, however, and remind that agent, in no uncertain terms, that those problems have to be disclosed to any future buyers. Not to do so is both illegal and unethical.
Ask for the inspection costs, or half of it and let it go at that. You have better things to do and you don't want to spend a lot of energy in a bad situation.