A little context: the building is structurally sound and they have done major updates such as septic, generator, and sprinkler system, and all mechanicals are recently inspected and tagged.

To their credit they're being pretty transparent about how this went down and they say they've hired a lawyer to take action against the inspection company they hired.  

Just to get started here in Chicago, there is a process through ComEd to assess, inspect, and permit submeters that took me 4 months to approve and install.

That is acceptable by our fire dept in Denver that inspects it once a year. 

Should I move forward with the inspection?

Our SRPD has no section in it which specifically asks if the seller has knowledge there was past fire damage (unlike for mold) to the property, however, the buyer's inspection revealed burned wood that had been sprayed in the attic.

You don't know the law, you don't know how to handle difficult tenants, and you aren't local to work on it.This is what Ohio law says: “The tenant shall not unreasonably withhold consent for the landlord to enter into the dwelling unit in order to inspect the premises, make ordinary, necessary, or agreed repairs, decorations, alterations, or improvements, deliver parcels that are too large for the tenant’s mail facilities, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workmen, or contractors.”I would give the tenant a short, direct warning that they have 72 hours to coordinate with the vendor and set a schedule for repairs.

The inspection never made me aware of this issue and I did not know what to look for when walking the house myself.4.

Was then informed that the seller did not want to return my $2500 EMD if an inspection revealed negative findings.  

The tenant should have inspected the water before signing.