Rick - I like your after the possible loss of earnest money loss.
Don't kick yourself on this one. You did enough conversation with the gent to feel it was OK to send the $500. Your establishing a inspection was spot on, and IMO is the norm in this level of purchase. Sure, you could have documented things a bit better up front on the earnest funds will be returned based upon - fill in the blanks - but that's behind you.
May have been a good coach, and you seemed to like the price. But enough yellow and red flags from the Seller to just walk away. (Not taking it to the inspection, means something to me. And, if he represented it as being an AZ history coach, vs a state where road salts are more common, another red flag.)
If you get the cash back, great! If not, you still may have saved thousands
Keep up the hunt, things usually work out for the best,