This could take months.Have I overlooked a way to survive such a catastrophe?

Deductible is up to you, but remember, insurance is for catastrophic loss, not for maintenance.

I calculate 350 a month in cash flow without any catastrophes, and I think 300+ for me is a great deal. 

I could write off my loss only in the tax year that I lost my condo as a catastrophic loss.

First the odds of this person cooperating with you and not make the whole scenario look like a catastrophe is nil to none after they are served with eviction papers.Unless this is the one person out of thousands that lives a perfect clean life and keeps his place in show quality it is probably not a place you want to show because ultimately that is a reflection of your business model and how they will percieve your upkeep of your units.

forgot to mention that it'll be a 10 year note, but we'll probably pay it off in a year if we have no major catastrophes that require $

You will be investing considerably more time and emotional energy going that route, especially if you want to self manage.I'd say that $10K is the buffer you need on hand to weather a bad eviction/move out or other catastrophe, so might be cutting it tight financially.

(@Kevin Perk has written a lot on this.)What I have done is reduced my coverage (to save on premiums), and I file only on truly catastrophic claims.  

When I see a potential flip property that has been on the market for a long time I can't help but wonder what catastrophic defect it has that has prevented someone else from purchasing it.  

There is one that stands out over and above the rest...I wrote the following article as my first BiggerPockets Blog post -- to this day, I believe it's the most important advice I have ever (or ever will) be able to provide to other investors/entrepreneurs:http://www.biggerpockets.com/renewsblog/2010/02/10/controlling-your-real-estate-deals-manage-catastrophe/Ignore it at your own peril...or embrace it and find that everything in your business becomes less frustrating, more productive and more in-control...