Hi, Chris. It sounds like you contractor is being real reasonable with you. The stripping will be a big job. I'm not sure what he/you mean by a water based solvent but it is probably one of the non-methyl chloride based strippers, which is a good choice and safe for you and him.
Again, my guess is that there was a problem with the poly and not of his making. He is treating you in a fair manner. From what I have heard so far, you will end up with a good job and I would have no problem using him.