It blows my mind that such a well-regarded builder would let this happen, on so many levels. First off, letting that thing out of his shop, with his name on it. Second, charging so much for such a compromised item. Third, taking a hard line on his "no refund" policy.
It also looks like the OP exercised a great deal of patience before going public. In my workday world I often deal with over-reaching jerks, and over the years I've found that if you give them enough rope, they generally hang themselves, but you have to give it time and patience. Having read the entire thread, it looks like the maker not only brought his own rope, but also cultivated the tree.
If this lingers much longer, it's hard to see how the maker will continue to enjoy a great reputation, even if he now finally does a refund.
Kudos to the OP for his temperate approach before going public.
And a moral to us all - in this world of instant and broad communication, you have to consider the possibility that you'll be slammed far and wide if you don't do the right thing...heck, you can be slammed by jerks even if you do the right thing!