What a mess….I really feel for you and the position you’re in, and through no fault of your own.
As much as I hate to say so, I’d be inclined to instruct the Solicitor to prepare for Court and to inform the Developer / Builder of that decision, and of the fact that your going to add the costs of alternate accommodation (a serviced apartment?), storage costs, and anything else of relevance that you can think of to the amount of your Claim.
Hopefully the other Parties will come to their senses once they know that the proverbial wheel is turning faster, but in the event that they don’t, you should rely on your Solicitor’s advice that they “haven’t got a leg to stand on”.
Have you considered obtaining an expert opinion on the best method to remove the paint and an estimate to do the work professionally (not that you’ll be doing the latter), just in case the builder continues to claim that it can’t be done; actually I think it’s just too costly for them to do in the way that they’d prefer. Perhaps have a look at the advertisers on this Forum’s Home Page.