It sounds to me like they have been trying to work with you on this to make it good. I agree that it is a pain and a hassle, but so is going to court. In a couple years, the headache is not going to matter, anymore. I would try to negotiate with them for a bigger discount and get the floor done.
You *could* try to find another contractor and see how much THEY would charge you. If it is LESS, then you would have a firm basis for negotiating the contract price down.
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