It's a shitty situation. I reviewed your OP, what's odd is no mention of the oil light (usually means low oil pressure) didn't come on. With no oil (1/2 qt out of what, 7 or 8 quarts?), I'd fully expect there to be no oil pressure and the light to come on.
If them voiding the sale, refunding in full will make you satisfied and they go for it, I'd say go for it. Given the current car market im sure they'll more than make up for it with the next sucker. Make sure you post the
VIN so others will know to avoid the car.