House seller holds my down payment, stalls and denies closing(NY,USA)!?!?

I am trying to buy a house in Brooklyn, NY, 11236. We signed a contract in January and STILL we haven't closed. The seller keeps on pressing for time, stalling and stalling. The seller has debts totaling around $260,000 as found by the title examination. Can he really do this? Can he withhold my down payment, without allowing us to agree a closing date? The contract states that closing will take place on or about 60 days from signing which was January(it's clearer been longer than that). Do I have a case in saying that I want my down payment back right away? I want to buy a house but this seller it holding my down payment as hostage! The contract states and I quote "If a Purchaser defaults hereunder, Seller's sole remedy shall be to receive and retain the Downpayment as liquidated damages." (Also what does "purchaser default" and "seller default" truly mean? I find there being no wrong done on my part in asking for my money back after I have professionally fulfilled by end of the contract in sustaining enough money to close, conducting the title examination, etc. I simply want my down payment back. I find that the seller has done a wrong in delaying the closing to an absolutely unknown time, only fitting for them, not us(my party including my attorney). There has been no attempt to give us a closing date, despite numerous attempts on our part. )