Sorry to hear this. Maybe bring it to a certified body shop and have them checked to see if any actual body damage was there. It's hard to believe what a SA says after all they can't be more professional than bodyshop guys.
As for canceling the sale, I believe it can happen but like others have mentioned, it will be a long and stressful process. If you like the car and think that you have got a good deal, try to get them to fix it the right way and enjoy driving.
I am glad that when I bought my car my SA actually pointed out some scratches and minor damages. I was offered a great deal to buy the car as-is but the salesman later gave me a $200 gift card to shop at their store. Better than nothing I guess.
Must stop eating..............