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Each state has different rules on what "as-is" means, but almost all use the term when it comes to realestate sales. At two years, you are facing a hurdle that any issue could be the result of new conditions, acceptable wear / settlement, etc. Has there been any changes in the area? (New house built next door, new addition, earthquake, flooding, etc?)
While you may have been given a home warranty with the purchase (do check your sales paperwork to see if there is any warranty and what it covers for how long) the house is sold to you as-is; it is your responsibility to raise concerns prior to taking over the house, so going back two years later is a huge up hill batle.
The home inspector is also going to be found faultless, as their reports almost always have words like "consult with an expert. . ." after each report section and they have disclaimers for missed items, etc. I got certified as a home inspector and was surprised at just how little they actually require you to know to become an inspector. They are really just an extra pair of eyes to help inexpereinced home owners look where most people don't look or go. You even mention that the repair work was well masked, so you didn't notice it until you began looking for it. A good inspector might have caught it, but you won't win any court cases proving yours wasn't good enough.
The Seller will claim that any foundation issues were fixed and resolved, which is why they marked "No" on the foundation issue section. They fixed it; so it was no longer an issue. If it came back, that is a new issue. You and I know this is bogus, but to win in court you have to prove intent; and the builder can easily show they thought it was fixed. Or, they might even be able to claim they were unaware - the repairs were from the previous owner, and were hidden so well HE and YOU didn't notice them.
So the next step is to meet with your home insurance agent. As I mentioned above, if there have been any enviromental changes (a new house next door could have changed the underground water table flow or pressures, for example) you may be covered. Even if there are no issues, you still may have a policy that allows for major repairs to be covered after a certian cost threshold, etc. You'd be surprised at what your home owners insurance covers - find out first; they might have in house or low cost engineers who will do the initial inspection, etc. They also will provide advice on your home sale; if they think you have a case against the Seller.
Best of luck on this issue. Make sure any solution you pay for solves the cause (Stress on the wall), and doesn't just fix the results (cracks).
There are two types of cracks in foudation walls, horizonal and vertical. The vertical is from settling and usually is not that bad a repair onec the settling stops or the cause is fixed. A horizontal crack in my opinion worse unless it happened right as the house was built and it was backfilled incorrectly. That should have been fixed at that time though. Horizontal cracks are a sign of lateral pressure due to either a water problem, improper wall sizing or a combination of these. In these conditions I have always felt complete excavation outside the wall and reconstruction is your best approach with the proper sized block or concrete wall with buttresses as needed.
You mention the future sale of the home and I would think the total replacement would be the best way as it will not leave any red flags. The steel plating would point to the problem and I can just think of all that would go through a buyers mind. Little things like how long will it be before the plate rusts out and needs to be replaced, even though it would probable last a long time.
I would think you should spend the money on a consult with a structural engineer and get a written report on the problem and his recommendations as to the best repair. It will help with any future sale of the home. Without drawings the consult should be less than $500. I would bet he would recommend total replacement.
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