Landlord retaliating + Illegal Basement Apt

I live in the state of New York. I recently moved from a top floor apt to a basement apt in my building, however when the landlord created the lease and had me sign it, he later modified the lease to state that the basement apt was for "storage only" - then he made a photocopy of the lease and gave me the copy in a sealed envelope.
Since I'd been living in the top floor apt, I had no reason to suspect anything awry, and put away the envelope.
The basement apt has two leaks in the ceiling, one in the bedroom and one in the kitchen - to which my bedroom floor has flooded three times since. On the first flooding the LL took care of the issue and dried the carpeted floor, but on the second flood he completely declined to do anything about it, and the apt began to stink of mold and mildew. After questioning him on this, he reiterated that he could not keep compensating me for this problem, and did nothing.

So, on my own accord, I called a carpet cleaner and deducted the job from the rent. Now, the LL has shut off my cooking gas (which that + electricity is included in the rent) and has played his ace card about the statement in the lease, trying to intimidate me to not take him to court. Having realized now that he duped me into taking an illegal basement apt, what are my options legally? I do not have the money to move and I feel that this is a severe injustice, not to mention I feel that he fraudulently used my signature on that lease.

Can I sue him for the damages and the lease agreement? And would the courts understand my position in all of this?

You need to call legal aide. Yes, you should have immediately checked the lease he handed you. But he cannot cut off any utility to the place for any reason, even if it is for "storage" only. That is an illegal eviction and can cost him big bucks. And a judge may wonder why gas is included in a unit for "storage" only??? And why is water run to a unit for storage - surely there would be no need for water in a storage unit?!!

Be prepared to show this was a residential unit. Show utilities, photos of the unit's kitchen and bath (you wouldn't need those in storage), show a mail box (not needed for storage either). These should prove that the LL rented it with the intention of a residence, not storage. Then sue him for an illegal eviction (called a constructive eviction). Legal aide can help you.