First of all you should speak with your Realtors Broker as soon as possible.
The home can be offered for sale "subject to cancellation of existing escrow".
Having canceled prior to contingency removal places you in an excellent position. If the seller wants to sell the home she will have to sign the cancellation of escrow eventually, she cannot open a new escrow with the current contract and escrow still in play. She can, however, make this a pain in the neck and draw it out.
Just as an FYI, the party who files for arbitration or mediation must pay a substantial fee to get it started. If what you say is accurate the seller has no case whatsoever; it would be a waste of her time, money and energy to file against you, I don't see how she could win. It will likely not be necessary for you to file against her either as sellers who want to sell come to understand that they must sign to move on. Her agent and the escrow officer need to reacquaint her with the terms of the contract and advise her that she in in violation of the contract and could be subject to a fine for the delay in releasing you from the contract.
It has been my experience, that with the right amount of pressure the seller will sign the cancellation. Call the broker and call escrow, have them put the heat on her, call everybody daily until you receive your check.
If you decide to pursue the purchase of the home through another agent, be certain to obtain a release from your current agents broker so that a procuring cause situation does not occur. Procuring cause relates to the commissions paid to the agent. The agent who first showed you the home and wrote the contract will be due the commission regardless of who closes the deal should YOU purchase the home and they decide to pursue it.
Perhaps the agents broker can find you another agent in the same office to complete the transaction and an equitable arrangement can be made to compensate the first agent with a referral fee of some sort.
While these situations can be a little messy they usually iron themselves out in short order. The contract is explicit on how it is to be resolved.
Best of luck to you,
Prudential California Realty