How would you handle this at this point?

[ArizonaPete]

I would demand my funds to be returned within 30 days of receipt of the demand notice. Send this communication with signature required and delivery comfirmation. Also state all your reasons for asking for your deposit/payment back. Explain that if he does not return your funds within that time period you will be forced to take any and all legal actions necessary to recoup your funds. That is what I would do at this point and stop listening to his excuses after all he has lots of time on his hands to come up with new ones the next time you call..

Good advice. Stop playing Mr. Nice Guy. You'll lose in the end. Time to take off the gloves and do a little bare knuckle/gouging fighting. And don't worry about his reputation - worry about your money!