Seems you have the proof the odometer was rolled back. I am pretty sure you will at least get your money back plus all expenses.
Ignore the so called "black mail" follow up. This is not "black mail". This is law. The dear violated a federal law. You have a good case. All depends what you want to do. I would enjoy the car as of now (take long trip with it), and get your money back if you wish once titel work is done.