Should I sue for earnest money?

[Shadrick Davis]

I accepted an offer, from among 3 competing offers, for a single family house in Indianapolis.  Part of the reason I accepted the offer was because it included an "as-is" addendum.  The buyer is now trying to back out after inspection based on a few items being marked as "poor" condition.  Her agent is saying that I misled on the seller's disclosure for marking the mechanicals as non-defective.  All mechanicals are in fact functioning and she's referring to the age and maintenance with the inspector advising that they are probably near end of life and will soon need to be replaced (still, non-defective).  She is also citing a cracked truss in the attic, a (brand new) garage door that was difficult to close, and several other small repairs.  She says that her team lead agrees that any 1 of those items is an out.

In my opinion, none of those items meet the criteria of item #4 of the addendum that they are citing as grounds for release:

4. DEFECT DEFINED: Under Indiana law, "Defect" means a condition that would have a significant adverse effect on the value of the property, that would significantly impair the health or safety of future occupants of the property, or that if not repaired, removed, or replaced, would significantly shorten or adversely affect the expected normal life of the premises.

My take is that the buyer flippantly used an "as-is" condition to make a favorable offer but with no intention of standing by it.  I lost my other 2 offers and am now forced to re-list.  I think I have every right to keep the earnest money as my actual returns may well be damaged.  Should I take it to Small Claims Court?              