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I'd raise hell at the store the wood was purchased from, and try to get them to pay for rework. It's a hell of a longshot, but if the store really values it's reputation it should stand by the products it sells -- even if it has to then in turn go after it's suppliers. If they don't, whatever public campaign to let other possible customers know that the store doesn't stand by it's products may be enough to convince them they should make you happy.
Or you can talk to a lawyer.
That wood certainly has to go. You can't ameliorate moldy studs. If you can get someone else to foot the bill, great. You may have to rework this out of your own pocket, though.