Yee haw! We got the keys to our new place and couldn't be more excited! It's our first house so the excitement is a mix of joy/fright. 
This forum has been an invaluable source of information. I appreciate everyone's help and encourage others to use this site.
Short story:
It was quite troublesome but we finally managed to deal with the sellers, tolerated the near-imcompetent LO, and survived underwriting heck. We now have a house!
The longer version:
We put in an offer on a house only to find page after page of material defects in the house. Wonky roof, improper grading of the driveway (which covered a basement window!), it goes on etc etc. This, on top of the fact the owner thought of himself as a fair handyman, which was not true. A contingency in our offer stipulated the deal is over if there are too many things wrong and we get our earnest money back. They refused and we were one day away from going to court to file case when they gave up. We searched again for weeks and found another home that was over-improved to the nth-degree. No go on the price. We finally found a rehabbed/flipped house in nice shape. There were some eccentricities the sellers refused to "fix" but we finally managed to come to an agreement. This was after the comical/frustrating price negotiation. They would counter offer with a drop of $1000 in price. This went on for awhile. Our experience with our LO was driving me crazy at this point, since I was paying more rent and storage fees than I wanted. I had to send things REPEATEDLY to the LO. I had to have the same converstion multiple times about this and that. I ask if they need anything else and they say everything is fine. Not true: 2 days before closing, they don't have our homeowner's insurance information! Their response: we've repeatedly contacted the insurance company and haven't heard anything back. What!? That doesn't like everything is fine! I also have to resend gift letters and bank statements. It's a circus from start to finish.
We got closing and there are mistakes all over the HUD-1. The taxes are calculated incorrectly so our escrow account won't have enough money next year.... except we're apparently getting money back from the deal! What!? We get that taken care of and pushed through at the very last minute. Our super-awesome title agency guy rushes downtown to get everything filed and moving. I get a call from my realtor with congrats and she'll meet me to give me some key! Woo hoo!
Of course, this story has the perfect ending this drama. I meet my realtor at the house only to find the lockbox with keys is missing! She calls the seller's agent and can't get ahold of him on his cell or at his office. So we're stading in front of the house waiting for him to call back. His office finally gets through and lets him know what's up and calls us to say he didn't think we'd get this done in time and grabbed the keys to bring to my realtor. A nice sentiment, but quite inconvenient at the current time. He apologizes and says he'll be there shortly.
It starts to rain. (I'm dead serious)
Well, in the end I got the keys and the better half and I did some minor shopping for the house. I'm moving in tomorrow.
Thanks again everyone! I'll post pictures of the house if I'm too tired from moving.
