Contract Law: My construction contractor will not refund my full deposit for work not even started. Do I have a case?

Deposit back in a lawsuit is no problem.  Interest maybe.  Breach of trust, forget it.  But you have to sue to get money.

Are you saying that, for reasons neither party was aware of when contracting, the contract CAN"T be performed, or just that you no longer want it performed?  If the latter, you have a problem.  You might have a claim to rescind the contract if you can demonstrate that the contractor, as an expert (salesman or not) should have known about the issue and informed you before contracting, but it's a long shot.  If the contract stands, that still doesn't necessarily mean that the contractor gets to keep your deposit (does the contract make the deposit nonrefundable?), but you could be liable for the profit the contractor would have made on the contract, which could be worse. I'm not sure what you mean by "breach of trust", or how that differs from breach of contract, but if you succeeded on a claim to have your deposit returned, you would be entitled to interest on it, but no other damages (unless the contract also provides for attorneys' fees to the prevailing party.)