I didn't know the shop was a third party but at this point, I would be asking him to justify his existence. If I were to pay $350 for an inspection, I want information that's detailed and accurate, so I can make some informed decisions. IMO, he didn't do this for you, regarding the alternator (could have been more expensive than it was) and if he didn't make the imminent demise of the raw water pump well known, it's kind of like throwing a dry sponge at a window, to let someone know they left their wallet behind.
He makes no guarantees or warranties but you may still have some recourse. I would contact the Consumer Affairs people about this. Was this guy recommended by the seller? That may change things.