I placed 10% down on the initial purchase, and with fees (etc) the construction loan available to me is $26,000.During closing, my lawyer recommended that I make repairs and pay for them, then request a release of the loan money.

Seller only needs to sign the Release of Earnest Money form before the title company will release said funds. 

The fact that the seller hasn’t signed a mutual termination/release of EM is irrelevant. 

Best to go to the recorder's office and ask for help.When you loan is paid off, the lender will file a "release of lien" or some similar document.

The guy did not desire anything so released the fish.

Bank is wanting the land and home to be one entity but the mortgage company will not release title.

If neither qualifies to rent the home individually, offer to release them both from the lease.

Cash for keys - you release them for liability of their lease (Texas law allows this as long as all parties agree) in exchange for a discount (I.E. your last full month will be discounted/free if you sign a notice to vacate for the end of next month). 

Your last sentence is correct, the lender will have to release the Mtg on each lot as it is sold.  

I would talk to the PM and see if they will re-lease your property since this is an extreme circumstance it appears.