I need some advice.

I am applying for a california duplex under FHA. We were in a 90 day escrow (originally supposed to close may 19th, but it got pushed back due to the lending changes that happened during the pandemic. Last week around June 3rd we were told the seller wants me to sign an early release of deposit to ensure extra time on the escrow, extending it out to the 15th (CD due by the 8th, today). They said it was the only way because they were ready to close but my lender was still finishing w underwriting. 4:45 pm on Friday my agent gets news from the sellers agent that the septic tank failed inspection. They said they can install a new tank aug. 7th and write the payment into the escrow and still close on time. My lender is telling me we cannot close FHA unless it passes inspection. What the H*ll just happened to me? How do I proceed from here?