Ebbie, truly sorry to see the mess you have been left with. As 150 Driver stated, most of us have been there, to some degree or another. It is truly demoralizing when you turn up full of excitement, to find your dream project, in the bucket. Add Insult to injury when they say, not my fault gov...
So, where to go. Personally, I do not think the legal route serves anyone, other than the lawyers involved. Pair away all the noise, you have an aeroplane, on the ground, with a duff interior, that will be required to be signed off by an I/A, I assume. If it were me.
1. Sit down with the installer, and go through,clearly the issues. Do not apportion any blame. We just need to fix it. If he cannot do it, discuss someone else fixing it. Then discuss who pays.
2. Get a DAR to inspect it. This will cost you, but he can at least give you written credence that it does not work, and a route forward to get the aeroplane in the air.
3. I would then take the aeroplane to another installer, or if grounded, the installer to go to the aeroplane.
4. It may be you lose a lot of money here, but as above, we have all been there.
I had to pull an interior out, because the shop used non authorized materials, did not make a log book entry, and then denied they had actually done the work. Mines was on the ground for a year after that little escapade.