I think he is a cute yorkie, but not what I would expect either. I do not think you can tell when a pup is only 10-12 weeks old that it is of breeding caliber. You just take a chance, buy the best quality you can, and hope that they will grow to be in standard. Around 6 months old you finally have a good idea what you have bought. I just posted a picture of one of my males from the last litter. If I had waited another month, I would have never sold him!
I do think you should post who the breeder is you bought him from. As long as you only post facts, avoid all name calling, you will be fine. It is important for people to know.
I to, believe if you put down a deposit, and the puppy winds up unavailable or in your case too small for intended breeding, then the deposit should be available for return. Since you first agreed to put on another, that is fine, but when that did not work out either, she should have returned your deposit. I also do not like the for sale ads that do not clearly show the puppy. Some doll them all up in beads and outfits and it is hard to see the actual form of the puppy -- that usually turns me away. I want to see more than just the face held up by the hand too. I want to see how they hold themself, their stance, the topline, a little animation in the expression, full body pics, etc......Even at that, the full evaluation has to be in person. Pictures can be very misleading, even good pics. Sometimes it is not easy to take a good picture of a puppy either. They may not show their true potential. That is the way with me and my photog skills, or lack of skills, I should say.