Not a motivated seller.

If not, what would be motivation for the lender to pressure client into FHA?

Watching your mortgage payments get paid by someone else is always a good motivator (becoming a landlord brings its own challenges, but it's one of the easier strategies to explain).I wish you the best!

Seller seems pretty motivated (i.e. flexible) and has nothing to lose by working with me to get this thing closed, rehabbed, and cash flowing again, so perhaps he will entertain some creative techniques to get this done.David, or anyone else, can you give me some more guidance on the owner financing terms I might go back to the seller with?

From my (non-lawyer) experience, yes, the lease remains in place (The Covenant of Quite Possession).  

The utilities will have to remain in my name.

Since the air in the above room is seldom that humid, moisture is going to constantly diffuse from the slab into the air and as the surface dries it will continue to draw moisture up from the bottom of the slab.As in your case when the ground beneath the slab is very wet & the slab surface will remain damp, slick and moisture will condense beneath any objects placed on the slab.

The real estate agents that I've dealt with have been okay, but again they also seem to have their ulterior motives.  

Could be a motivating factor.

(Head remains chopped off)