Welcome to the joys of homeownership and the thrill of feeling like it will collapse tomorrow!By now you've found out all the stuff you wish you knew before buying.I think every homeowner could come up with a similar list, with some problems much worse than yours!
First things first.It is apparent the house has had its fill of being wet(flooded house,bad roof,leaky basement)and needs a good drying out from top to bottom.Also,take a moment to consider how well the house is ventilated...especially bathrooms and attic.
Your basement leak can probably be solved with any number of solutions,I'd focus in on how often it leaks,volume of water and locations.Cement holds up bridges underwater
and isn't going to pieces anytime you'll see it.Consider a dehumidifier for the basement as well.
Roofs quite often are overlayed.Just check to see how it stands up now in a good rain.The mold you see is probably old and will be there forever.If there is some leaking,$10.00
of roof asphalt patch and a saturday morning patch job will be cheaper than a law suit.
I don't see past insect damage as a big deal
and the mold is more evidence of moisture.
The exterior wood is in good shape for 2coats of paint in 27 years!You're lucky you're not scraping 20 coats of peeling paint.I could be wrong but it sounds to me like you bought a normal house.

Matches,

If you call these the joys of home ownership your an idiot. I bought this house with certain criteria in mind. This house was advertised as having a "full dry basement," "new roof/replaced roof", etc. Not only that the seller's disclosure also was false and completely misleading.

If you want to pursue a legal issue, I suggest you spend $300 or so and get a "mechanical inspection" by a professional inspector. Then you'll have either a good basis for your issues, or a reduction in your concerns. In retrospect, of course, you should have done that before buying.
You may be over-worried. I wouldn't be surprised if Matches is less dumb than you think.

Of course my use of the term "joys" was sarcastic but I'm an optimist.How the house was advertised was not mentioned in your first post.I responded believing you were attempting to find out how serious the issues were and how they might be corrected.Thank you rpxlpx for the kind word!

I was not trying to invoke a solicitation for sarcastic comments. It appeared that this forum may have been able to supply me with some quality feed back directly related to what I wrote – not reading anything else into it.

We were lead, verbally and in writing that we were purchasing a particular home; when in fact we ended up with something else - a problem. Considering this will probably be one of the largest purchases we will make, I’m not going to layover on this one. I have sold many things through the classifieds in local newspapers. I’m always honest about the history of the items I’ve sold. This way the buyer is able to make the appropriate decision. When you are lied to, the decision is made for you, as with us. Now we are strapped not only with repair cost but 1) having paid too much for this home and 2) a home that will be hard for us to sell (we will be honest), 3) a home with a depreciated value etc.

I do not understand why one would try to insinuate that what we are going through is acceptable. If more people had the “guts” to stand up to cheating people, like the ones who sold us this house, then we might not be in this situation. The code for our society today: I will do as much as I can get away with. It seems the generation at the helm currently (age 45 to 55) has dropped the ball. The moralities of our country **** at this point…but that is for another forum.

...the word that got edited (****)related to poor, not good, deteriated state...

This brings up the FIRST rule of buying a house (or any thing) BUYER BEWARE!!!!! Most sellers fudge a little when selling their house, it does sound like you have been seriously misled.
A couple of your issues may not have much merit.

1. The flooded basement from the broken pipe, once the house was dried out, problems related to this should be history. You didn't say how long before you bought the house this happened, but if it happened last winter then as long as any damage drywall/plaster, and /or insulation has been replaced there shouldn't be any long term effects.

2. The roof, is the new asphalt roof over "Shakes" or wood "shingles"?? Installing an asphalt shingle roof over a wood shingle roof is acceptable practice. If the new asphalt shingles were applied over a true "Shake" (split thick butt, 3/8" to ½" SHAKES) it would look terrible.

The best money you can spend when buying a house is to hire a licenced, reputable home inspector. The $150.00 to $400.00 you spend on this could have saved you finding these issues AFTER you bought the house.

You may have a valid case on the wet basement, find a good lawyer and have at it.

...Yes we did get a home "inspector" which did a mechanical inspection. Believe me I have done all kinds of research before buying. I don't recall the (cracker jack)-certifications a "good one" is supposed to have, but this inspector had them all. I guess the inspector was fooled too.

I have news for any homebuyer: these inspectors are a bunch of CLOWNS. Don't waste your money.

The only thing that I can add is an experience of my own with our home inspector...We bought a 1963 ranch home a few years ago. The house needed new carpet and paint before we could move in. It took us a little over a month to get the house liveable before we could move in. Approx. 2 weeks after we moved in, we discovered dry rot in one exterior wall and had to replace it. The gutter was not hung properly and it allowed moisture to seep in between the wall. We had it inspected at the time we bought it and the inspector never noted it. We tried to get our inspection fee refunded because this was something pretty obvious and it should have been caught in the inspection. We discovered, to our dismay, that any disputes needed to occur within 30 days of posession of our home. Since we did not move in until after the 30 days were over, we could not recover the inspection fee. I'm sorry your first purchase was not a pleasant experience...neither was ours. If the house was truly misrepresented, then you should have recourse. Was it too late to at least recover your inspection fee? Try not to be too hard on the other people replying to your post. They don't mean to upset you any more than you already are. Home ownership does mean constant maintenance, especially when it is older. If it is not one thing, it is another. This is no excuse for people to hide behind, though. The concern you have about the water trapped next to the foundation needs attention by you, now. You don't want the ground eroding away from your foundation. Find the more direct sources of the water...and re-route it away from your home (i.e. downspouts, splashblocks, and creative landscaping). You don't necessarily need to spend alot of money to do this. You may have to do something as a quick fix until you can afford to put in something along the lines of a french drain. We have a similar problem with our barn, but it is not our home that has a water problem. We have dug a trench around our barn and put tile in it until we can afford to put in a french drain system. It is not pretty, but it is working so far. When the pipes froze with the previous owners, do you know how long it took for them to get it cleaned up and dried out? If the problem was taken care of quickly, then any damage would be minimal. The longer it sat wet, the greater the damage would be. There should be a gap between your drywall and your floor...under your carpet. They leave a gap to help protect the drywall if there is ever minor flooding inside the home. If your home was drywalled properly, it should be like this. Your moulding just covers up this gap. Good luck and let us know how things go for you.