Have you heard about getting blood from a turnip? I suspect that's your chances in your situation. A seller in foreclosure is having financial problems and likely have no means to repay you, even if you sue. Your agent may have been able to do some research in public records and anticipated that the home may have been a short sale and the listing agent should have absolutely disclosed this.
If you want to pursue your options, you'll need to spend some time and money with an attorney.
I have a question for you, do you still want the house if you can get it? An agent experienced with short sales may be able to postpone the foreclosure several times and get the sale closed.
If your agent and or the listing agent don't have the necessary experience, they may be able to find a negotiation firm to help. I use a law firm after negotiating my own for many years. Someone who does it full time will have a better chance of getting the sale approved.