I know this is all resolved but I just want to give my opinion. I think you made the right decision and I would not allow one of my puppies (if I were a breeder) to leave unless I was 100% happy with their health and confident in the buyer. I pesonally would not argue with a breeder over the dogs health. If a breeder wants to keep her puppy longer due to medical concerns, then I applaud that breeder! Only caring breeders do that. Breeders who are only concerned for $$$ will gladly sell a sick people without a second thought.
I was not allowed to take my Katie home until she was 5 months old because at 5 months she was only 14 ounces. Her breeder was concerned for her overall health. Some people have told me that 5 months is too extreme and that the breeder is paranoid. But ya know what, that breeder has been breeding for over 20 years and has FAR more experience then I do. So who am I to assume that I know better and try to push the issue? No way would I do that. I respected Katie's breeders decision and gladly complied. I was also secure in the knowledge that the breeder was doing all this for the well being of my little girl. So far, Katie has had absolutely no health problems and I'm thankful for that.
Anyway, I think you did the right thing for you and your pup. I really do applaud you!
Good luck with your little pup!
PS - I think Kim (SoCal) made a good point about the legal terminology in your contract. It's just something good to keep in mind.