Well, after reading the written inspection report and the general feeling that I had being back in the house yesterday, I'm about 99% sure that I'm walking away from this one.
There are just so many things that need to be fixed, updated, replaced because they weren't maintained properly, etc. I really think that if this house had been occupied by the owner, things would be in better shape. However, since it is fairly obvious that it has always been a renter, things have just not been kept up.
So, I think we are back to square one. I'm also thinking about changing realtors.