Welcome to Trulia Q and A. Most real esate contracts have a home inspection contingency clause which says that your are entitled to a timely inspection. You are obligated to make timely notice of your requests (if any, and most should be about items that are either not functional, a safety concern, etc), which is sounds like you have already given timely notice and that the item you are describing is a safety concern. Although, I do not know the full details of the contract. I can say that it would be best to discuss the matter with your real estate attorney.
I know that in certain parts of NJ, the use of an attorney is not customary. But these are the moments where an RE attorney can assist in your contract negotiations and explain the appropriate steps to follow.
Failure to come to terms on a item on a home inspection, can be grounds for cancellation and depending on your individual contract terms, you may be entitled to full return of your deposit money. Again, every contract may start out the same, but could have changed during your attorney review period.