Security Deposit Return

I hope this is the correct place to post this. I am looking for some advice.

We recently moved out of a rent house where we had paid a $700 deposit. The only thing wrong was a small patch of carpet, maybe 12" x 12" that has a stain where my daughter left a permanent marker opened. The room is approximately 10' x 10'. This patch of carpet could be repaired, but even replacement of the entire room would cost no more than $200 or so, I would assume.

Also, we were told to leave the keys at the house when we were done. We left the keys on the counter and locked the door behind us. Now the landlord is saying they did not have another key, so had to have the locks broken and replaced and are saying that is also our responsibility.

When we moved in, we signed a 6 month lease, renewable to 18 months with first option to purchase afterwards. They decided they were going to sell after 6 months, and we were not in a position to buy at this time. They are saying they gave us the ONLY key since we were buying the house.

My opinion is that we were renting with the OPTION to buy. They were still responsible for the house, so why wouldn't they have a key. Seems to me that is their mistake.

How should I go about handling this. This lady is a total psycho. We were told a lot about her ways AFTER we moved in, but had no reason to believe it until the end of our time there. She is being totally unreasonable.

Please help! Thanks!