I understand that, but either they were talking about what was legal considering the grandfather or the horrendously underbid the job. You can't rewire a house full of ungrounded circuits for $2K.
It is a pretty small house, but yes I have heard from several people that he probably tried to word the work order vaguely to get by with not re-wiring the whole house, though that's what we said we wanted prior to closing. When I gave the electrician a piece of my mind on the phone, he was like "Oh I give the best prices in town and do the best work. Ask anybody. Or you can go pay a ridiculous amount with one of the big companies around town".
On the other hand, I don't even know if he remembers the house and the work he said he would get done. I do not trust him to be competent in the least and I will not have him work on the house.
Now just to decide on how to approach the seller and what kind of deadline to set. The wording of the contract makes me think I can only get $2000, that she will not pay for the whole house to be re-wired if it's more than that (which as you've indicated, it almost certainly would be).