The reality is you're pretty much out of luck. I'd run, not walk, away from this house and this seller and chalk up the $1,500 to eduactional expense. You already know he's lied and none of your professionals have given you much of a green light. Whatever you know about with this house and owner, there are probably 50 other things you don't know and won't know about until after you close and then you're stuck with it. Realistically, you can forget about getting your expenses back, it's not going to happen and it's not worth trying to sue over.
I'd just move on. There are so many houses on the market without these problems. Why sign on for sure trouble?