The underwriter of a mortgage wants to make sure that the property they are underwriting a mortgage for is worth it. If the building isn't finished, the association is not stable, there is litigation between the builder and developer and the City because of bankruptcy, etc., these could all be reasons why there is no chance of delivering clear title and why it's considered unstable. And, those are reasons why a seller would say "cash only". They pretty much know that financing is going to be a problem through a conventional lender. If you can find a private mortgage holder who is willing to put up the money in the face of all of the problems, you could try that.
If you're going to try the cash route, make sure you aren't leaving yourself with no reserves to pay for the place.
By the way, the problems I describe are actually going on in some condo developments that have units for sale right now!!