From the time line you've presented it is clear that you need to find an attorney and get very aggressive in extracting yourself from this transaction.
My opinion from your description, your agent (and supervising broker/manager) should have been working with legal counsel long before this point. As soon as the seller's documents were late they should have been getting things lined up to extract you if the other party failed.
The escrow company can't take any action unless it is agreed upon by both parties. It has to remain neutral. Your steps now need to show the other party that cooperation, returning your money or transferring title, is the best and least expensive option. In other words damages when you win your case will far exceed the pittance they are claiming they can keep.