Your question is a good one and should probably be directed to a local attorney in your state. The answer is heavily dependent on local law, but I can give you a basic overview of security deposits for your reference.
The answer depends heavily on the lease you signed and whether it has an "acceleration" clause or something similar that would make all the rent due upon breach. Generally, a security deposit is not the property of the landlord; it is required to be kept seperate from the landlord's general funds.
Suing in small claims court (and defending against possible counterclaims -- get a lawyer to review the lease you signed for you) might be possible. I would recommend speaking to a local lawyer because security deposits are heavily dependent on local landlord-tenant ordinances or state law. Each state treats the relationship between landlord and security deposit the same, but the specifics (i.e. interest rate and remedies) are different.
NOTE: This answer is not intended to be legal advice and should not be construed in that way. This answer does not create an attorney-client relationship and no such relationship may be created absent a signed retainer agreement. The author is licensed in Illinois only, and his answer is for educational purposes alone.