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Owed money from job

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I did a website for an individual who owns a dragstrip. They paid as we went along with the site. I never recieved the final payment of $170. I sent them a bill over a month ago. I've called and their response was that I never completed the job, even though I did. Now they've hired someone else and said that they will deduct whatever this person charges to "fix" what I did from my bill. I thought about small claims court, and even sent them a letter stating that I was going to do so if they failed to pay by a certain date. That date is coming fast and I don't expect a payment. Here's some other details: I have 3 pictures they gave me and am refusing to give them back since I haven't gotten payment yet. I also sent an email to a friend who knows them that essentially said, very briefly that this person was an a-hole. This has somehow gotten back to them and now they are threatening to sue for slander. I have no money for any type of attorney (hence the small claims for $170). Do I have a recourse here or should I just send the pictures back and forget the whole thing? My kindest thank you to anyone who replies.

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