Based on what I know about the build I would be hesitant to release the contractor from any enforceable expressed or implied warranty.. Not sure I understand your compromise, but I would say your house has some very worrisome defects and disclosing those defects will damage the value to the extent that an additional build site wouldn't offset your losses (plus, imagine the relationship you will have with the future owner and neighbor when he has to live with the mistakes). You will be taking ownership of every mistake the contractor made, passing it on to some future buyer, and contributing to the same mistakes he will undoubtedly make for others in the future. I think your generous offer to help him avoid proper restitution is a mistake, and you are correct to worry about future, undisclosed and unknown defects as well. Maybe you love the house, location etc., and are looking at it through rose colored glasses. If so, you have a decision to make about how bad you want to keep it, hopefully that decision is a little more informed now. Personally, and again this is only based on what I know from you, I would be seeking to have the contractor buy it back from you and I would move on.
Maybe I missed something, but I assume you found a process by which the contractor was forced into accepting some sort of responsibility. What process was that? Was there a building department? Permits, inspections? Also, I don't think I ever got a response about whether you had sealed engineered drawings for the structure.