are they trying to derail the closing?

The information shared is based on my experience and industry knowledge and should not be considered legal, financial, or professional landscaping advice.

second was Hard money it was legal then. 

So, to try to go a legal route because they might have fixed something a little over the limit isn't going to work.You will have to face that you selected someone that was not the right fit and be more hands on. 

assuming you use all cash - and setting aside closing and holding costs for now - you're in for 150K. 

My wife and I just closed on a duplex in Oakland, but the basement/garage was already converted into a separate living space with a bedroom and bathroom.

Well, once the title company/closing attorney puts together the final numbers for closing, they are being told that anything older than 7 years is forgiven.

Your question asking for detailed loan estimates from multiple lenders at the preapproval stage with  "exact cost to close" is very problematic. 

I learned so much along the way, including navigating the legal process needed to remove previous owners (squatters) who did not want to leave.

If you have a claim (and a pool is a ticking time bomb for a claim), your insurance company and their legal counsel will want you to provide all evidence of pool upkeep, including the grounds area.