Buyer backs out

I had a contract closing date end of Aug 2008. The buyer delayed and delayed. Then we were told that his buyer defaulted and was scrambling to find a new buyer for his house of his girl friends house. finally we served him with time of essence and did a pseudo close that he did not show up to. The contract was not contingent upon him selling his house. Now I want to move on and put the house on the market again.
My lawyer tells me that I can't get his deposit unless I sue them. He said I would win, but it would be expensive and could tie me up for (2) years. So his advise is work out a deal. The ex buyer offered about 15% of the deposit.
Does this all sound correct and normal for a Long Island NY sale?
If so, then it seems to me these contracts are a joke. For losing almost (6) months I get a couple of thousand which does not even cover my expenses.