I'd take all the deposit. Carpet stains aren't normal. And, the unauthorized dog didn't help. My renters left after 3 years with no stains on the carpet and they had a cat (I approved). As to painting --- unlike some - I paid nearly $200 for a 1 coat of paint of the same color and that was the best of 3 estimates and someone I knew. If it'd been painted darker color it probably would have been more. And, the ceiling wasn't painted. Painting isn't cheap unless you do it yourself. I think it's too late to do anything but be happy with the deposit. I made the same mistake - my tenant was a business owner and I didn't do inspections - won't make that mistake - when she gave her 30 days notice oh, by the way a leak under the sink (for awhile) and the caulk off around the tile tub -- that didn't happen overnight. My fault.