Buyer bails and refuses to sign escrow cancellation

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I got a pretty unusual situation as a seller and hope maybe someone can share some knowledge. I already talked to an attorney but other opinions would be appreciated. 

In a nutshell, buyers waived contingencies but then asked a 4 months escrow extension which was given against a release of the earnest money. After the 4 months they failed to close, refused to sign the cancellation and asked their deposit back.

Here is a summary of the timeline:

- Entered in contract with buyers in fall 2020. The contract was a C.A.R. land purchase agreement with a liquidated damages provision. 

- The buyers signed the release of contingencies at the end of the 60 days due diligence period

- Buyers didn’t perform and asked an escrow extension of 4 months which was granted against a full release of the earnest deposit

- Buyer signed the release and EM was transfered by the escrow company to my account

- After the 4 months period buyers failed too close again

- I served a notice to perform as well as a demand to close escrow

- Sent the cancellation of contract and escrow but buyers refused to sign and informally communicated their desire to recover their EM

- I refused to return the EM

While the contract is likely dead, the unfortunate consequence of this situation is that the open escrow must be disclosed to the new prospective buyers which obviously is a turn off and causes me financial damages.

I talked to an attorney who thinks the contract is void and suggested sending a formal letter to the buyers from his office to have them sign the cancellation

Thoughts anyone?

Thanks in advance