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I don't know how a licensed inspector can miss a water heater leak this serious. I don't know if I'd try to make him pay the full repair amount, but I'd definitely want a refund on the inspection. I checked the American Society of Home Inspectors website and they have a huge list of things they are and aren't required to inspect and describe to you. I couldn't really tell if they were definitely at fault for not telling you because it may have been concealed from them or whatever. I don't know if all inspectors follow these standards of practice but it seems like a good place to start.
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“It is better to be rich and healthy than poor and sick” - Dave Barry
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