Ok, an update...
As I had indicated earlier in this thread, I'm a pretty reasonable person. Initially I was willing to accept a compromise that my wife came up with, which I offered to the builder... that he pull this shell out, repair the cracks, and re-set it properly. He flatly rejected this (unless I was willing to pay for it, of course).
When the drainage inspection failed and he was unable to get the cooperation of our neighbor for the setback variance (he deeply offended them in the process of trying to get them to sign a letter of non-objection), his tone changed significantly. He seemed to be coming to terms with the inevitability that the pool would have to be moved, and it appeared that his mistake would end up supplying the easy "shortcut" to us getting the pool re-set without us having to put a lot of effort and expense into the fight. But then we (he and I, separately) learned from the guy in the zoning department that since it was such a tiny variance being requested, it was almost certain to be approved by the board (which meets next on 6/5), regardless of whether or not the neighbor agreed.
Still, there was a small amount of progress. For the first time, the builder offered compensation for the completion delay... the balance of my contract (about $1700) along with about $2500 in equipment upgrades. That was very welcome, and strictly as compensation for the delay, was fair I think. But he was very specific in that this was only in response to the delay (his lawyer presumably instructed him to not say anything that could be perceived as an admission of fault on the installation).
But it did nothing for compensating me for the fact that I'd be receiving a damaged pool. And the written warranty assurances from the manufacturer that had long been promised had yet to materialize, and it was doubtful that they'd agree to what I was asking for.
Furthermore, I was hit with another significant red flag. The builder said that the cracks couldn't be fixed until the decking was poured, which did not sit well with us for obvious reasons. He followed up a day or two later by saying that the decking had to be poured first in order to "lock the shell in position" because it had to be drained first (he had previously insisted that they could do the repairs underwater). If the pool does indeed need to be drained, it makes sense that the decking would have to be done first, as the ends of the pool (which are 1.5" lower than the middle) would want to pop up as the shell tried to return to its original shape once the weight of the water was removed... the hope would be that the weight of the decking (rebarred into the previously-poured footer around the shell) would be enough to hold it down.
But then this revealed a fresh problem that I had not considered before. After seeing a thread here a few days ago about brick coping problems due to there being no expansion joint between the coping and the deck, I took a closer look at my pool.
You can clearly see the out-of-level condition, as the footer was poured level to the top of the shell, with a mortar bed built up as the shell slopes down from the middle towards the shallow end to the left of this photo.
The most obvious problem is that, if the decking has to be firmly joined with the existing footer around the shell (to prevent the ends of the shell from springing up), there can be no expansion joint... unless I'm missing something, the two concepts are completely incompatible. In addition, because the builder forgot to dig around the shell so that the footer pour would also go under the rim, he said he intended to dig under the footer so that the decking concrete would go under it and the rim, further locking the two together.
Maybe the fact that the bricks are attached to the footer precludes the need for an expansion joint (in other words, if the decking expands towards the pool, both the footer and the bricks would be pushed, so perhaps they'd stay together as a unit). But my gut tells me a full-depth expansion joint between the decking and the coping/footer unit is needed.
But still, there's another problem. The coping bricks are not full-thickness, but rather are shaped like a J turned on its side (with the bottom of the J facing into the pool, curving down to cover the top of the tile). So, the exposed outside thickness of the brick as it rests on the footer is only about 5/8". The footer was just loosely formed as opposed to following what would eventually be the outer contour of the coping, so in most areas it's wider than the length of the bricks. With the decking then having to be poured on top of that thin partial "ledge" behind the bricks, it would seem pretty much a near certainty that the decking would crack here (where the footer ends and the full-thickness of the decking would begin), probably all the way around the pool.
Lastly, I've talked to a few other builders in this region (one of whom will be serving as my expert witness if this goes to court). Both were of the clear opinion that this pool is a mess and needs to come out of the ground. One of them confirmed my wife's biggest fear about fixing the cracks, saying that he's seen several pools of this brand that have had gelcoat repairs done, and the repairs are far more conspicuous than the cracks themselves (in some cases, the repairs looks ok at first, but after 4 - 5 years, look horrible). He also confirmed one of my fears by noting that, unlike a pool that simply is a bit unlevel from one side to the other (but has still maintained its shape for the most part), this shell's shape is distorted and is thus "in stress" (meaning more cracks are likely). Indeed, I'm pretty sure the cracks have grown since I first noticed the problem and did that previously posted diagram.
So, after staying up until 3am talking about it the other night, my wife and I decided, although painful, we must aggressively pursue the replacement of this shell, so that's the path we've chosen. This morning I officially transitioned my relationship with the attorney from consulting to actual representation. She has notified the builder that all communication is to go through her from now, that any settlement offers made by me previously are hereby withdrawn, and that a formal demand letter will be forthcoming.
--Michael