Though I understand that the seller now has the windfall of a free haul-out, if you just look at your side of the equation, that $700 did just what it was designed to do: protect you from buying a huge problem. That''s why buyers use surveyors. I''d take some consolation in the fact that you were smart enough to comission a survey in the first place. Many erstwhile buyers don''t, and then rue the day they ever wanted to own a boat.
Even if the seller knew about the damage (from a previous survey), you were still protected. Without the survey, he would not have hesitated to conceal this information from you as he took your check to the bank.
I never thought to ask about previous surveys, but that sounds like a wonderful idea. How would you find out if a boat had been surveyed previously, and who had done it, if the seller were less than forthcoming?