Generally speaking, when you sign a lease, you're liable for the full amount. Even if you renege before you even move in. The landlord has a duty to mitigate damages. That means s/he must try to relet the premises as soon as possible. You're still on the hook for whatever amounts the landlord is out in the period of time s/he did not have the place rented.
However, you may have an argument under these facts that the deposit amount is a liquidated damages clause. Liquidated damages refers to an agreed upon amount of damages between two parties to a contract in the event of breach. Generally, when there is a liquidated damages clause in a contract, no further damages are allowed.
You should also read RCW 59.18.253, and hire a lawyer.
I agree with you that this happened backwards, and as such, arguably there was no meeting of the minds. This argument evaporates if you move in, so if you are serious that you do not want to live there, don't move in.
WA does allow pre-move in deposits, but is very picky about the difference between a fee and a deposit. If it is a fee they have to tell you that, and that they are not returning it under any circumstances, and if it is a deposit, there has to be a walk-though checklist BEFORE you fork over deposit moneys.
Anybody can sue anybody else for anything, basically. But just because somebody says "I'm going to sue you!!" is not a reason to cave on the spot. I think you have a good argument that as he took your money first, then you signed the lease, and you never moved in, that the MOST he is entitled to keep is that 1/2 of the deposit.
Landlords are always on their very best behavior before you move in. Given his conduct so far, I'd say good riddance, and go find a landlord who understands the rules and doesn't try to get his way through threats. There are good landlords out there.
Using Avvo does not form an attorney client relationship.