I think this is a difficult situation.
A meeting with your client would be good, but I wouldn't hold out much hope of it changing anything.
I'm sure your client has the best intentions but probably his hands are tied and this situation will no doubt happen again.
I think the ball is in your court.
Are you prepared to put up with the hassle, or not? Is it worth the financial reward.
10K profit on good commercial work; I can see how you want to make this work for you.
If it were me, I would continue with the client and have a plan A if the work goes ahead and a plan B if the work does not go ahead. Review it in 9 months time and see if it's worth the hassle.
Ironically, I would actually push for more work.