How can i get back my earnest money ?

Almost 4 months ago i was in the process of purchasing a house. I signed the contract but down a thousand dollars for earnest money and had the inspection done. The sellers had a lot of hidden problems with the house starting with the couch covering the wall that had mold. The furnace did not work, the duct work on the home did not even go through the whole house not to mention there was probably about 4 vents through out the whole house! The inspector advised me that there is at least 30k worth of work on the property.Considering my loan has to be fha approved and the property was not i sign the cancellation form but the sellers are refusing to sign it. My attorney has been trying to reach them and after 3 months they finally came to the conclusion the would release 500 dollars to me and keep the rest!!! They aren't entitled to any of it and i would like it all back can anyone help me get my money back!!! I was going to take them to court but according to my realtor and attorney its not worth it considering i would be losing alot of money With attorney fees and court fees. I was considering trying to put a stop to the cashier check but i don't know if the bank would be able to do that. Any advise? Thank you