If Tony can document in some form (photos, etc.) the painted-over evidence of prior leaks, that might be sufficient to claim the sellers were not forthcoming on their property condition disclosure form. It also never hurts to make everyone—sellers, real estate agents (both buyer and seller agents), and the home inspector—aware of the problem and his displeasure. Whether you have an actual cause of action against any of these may be problematic but someone may step forward.