Of course I will explain that the security deposits and all obligations under the existing lease contract will be transferred to the LLC.  

I am afraid to allow yet another person in the house who is going to cause damage, which I will just have to eat because they aren't paying any security deposit.

You might get help from the owner to finance your down deposit amount.  

Are we wrong to expect the return of our full deposit by now?

Interest only or not, what rate to charge, deposit or not, etc...)Any ideas would be greatly appreciated?

Craigslist it for a few bucks,, then say free, if you remove by xxx date.I've given stuff on craigslist away and sorry to say I found if I charge a few bucks everything goes, if I put it up for free. they take parts and leave the rest and don't come back.So make them give you a deposit tell them remove at your risk ,,,sign here,,,, if it's all gone by ....I give you back your deposit.... or I'll give you back this much....Swing sets are huge risk and I wouldn't have one on my property. they can go to the park!!

Many times some of the grinders (companies on the take) try to make the earnest money deposit non-refundable PRIOR to the inspections.  

The action to quiet title could delay things, your end buyer could get impatient and walk, and you could end up losing your deposit and simultaneously leave the seller in a bind.That being said, your contract may specify who gets to select the closing agent / title company (for example, in Florida, whoever pays for the owner's title policy normally selects the closing agent, and this is often the seller). 

I have tenants interested in renting this building, they want to put down a  Security Deposit($750) and a Month of rent ($750). 

Inspections should be accompanied by lots of photographs so don't take peoples word that one was completed.I would be more worried about why there was no security deposit (bond) like you mentioned above?