Security deposit refund

I provided my landlord with both verbal and written 30 + day notification of my move. I received no response from him. After six weeks I called inquiring about the refund of my security deposit. I was assured the check was mailed prior to my phone call. I gave my new address to the landlord to prevent any further mail delays. After another two weeks I called again to inquire as to the whereabouts of my security deposit refund. Again I was assured the check was mailed , however this time he asked if I reviewed the contract. He stated that the new check he was sending would reflect the carpet cleaning fee agreed to in the original rental contract. He said the check originally mailed was for the full security deposit amount, but now the fee would be reduced from this new check. After another week I finally received a check with the carpet cleaning fee deducted. I called to complain and request a nominal late fee of 4% of my rent per delinquent month be provided me since now my elapsed time since moving out was two months.
The next day the landlords wife called informing me that since I complained a stop payment was placed on the check in my possesion. This check was in the amount they said was in compliance with the original contract. I had this check in my posession a total of two business hours. The very next day I received a letter stating that I must now send them a written response accepting the original contract terms or they will withhold my security deposit indefinitely. Is this situation worthy of pursuing in small claims court? We are talking between $550 and $750.

I would take them to small claims court if I were in your shoes. Read more about small claims court procdures at this website.