Having lived with a 200 year old rubble foundation for close to 40 years, I'd say the first inspector was absolutely right in his evaluation. While it is (barely) possible that some structural issue has emerged during the 5 years of your ownership, it seems very unlikely. Is it possible that the structural issue is not with the foundation, but with some of the timbers such as the sills, for example? The obvious evidence of structural problems ought to be relatively easy to see. At this point, you probably ought to see what the structural engineer has to say. He may well find the second inspector's report to have been unnecessarily alarmist. Having the first inspector take another look would also be a good idea. You probably also have to be prepared for finding that your potential buyer is just not the sort of person who would be comfortable with this type foundation even though they have withstood the test of time in 1000's of examples.

I know Lebanon, my step-son used to live there and he had an old house too. It's a lovely community, proud of their old homes, and if you got one at that price, you did well. This isn't a terribly cosmopolitan community and I'm not saying that in a disparaging way. It's a farming community, and the quintessential All American 'small town'. Sagging floors and cracking plaster are very typical problems with old homes in Ohio because of our geology. Just keep in mind that renovating an old home doesn't have to be an overnight project. It usually isn't. One lives with some of the renovation for years/decades. All the time, you find yourself learning as you go along. Our floor joist situation took us twenty some years to address, and that was as we were able to afford to address it, as we pay cash as we go along and danged glad to do it that way. I would not be afraid at all to call in various GCs to give estimates on the floor situation. Most of the time it's done for nothing. The replies and suggested fixes will go all the way from obvious patch up jobs to total tear up and replacements. But, you will get year's of experience somewhere hidden in all the info they throw at you. We were able to do some floor jacking at first and eventually ended up with joist replacement. Buying the time to do that allowed us to get all the work we needed done on a room renovation at the same time, and that translates into less disruption and a lower dollar figure. Hang in there and ask lots of questions and ask around your community for recommendations for any work you need done. You'll find in an area like that reputations get around.

Hire an inspection from a structural engineer. Any water leak so significant as to cause significant subsidence is major. I’d want a plumber to inspect that repair too. Individual specialists. In addition to a standard home inspector. Is the home such a draw that it would be worth a couple of thousand in inspection reports?

First photo: it looks like the brick wall has "canted" and is leaning out; last photo: it looks like this whole section is a "bump-out" from the original building, and it possible that the outer brick wall has settled into the ground (i.e. that it doesn't have a proper footing, and probably isn't deep enough). I have seen this with a porch supported by such a brick wall that was converted to interior living space as one example. Let me guess, the floor becomes unlevel and dips down and away from the room right about where the original side of the house used to be, before it was bumped out? Underneath this bump out is probably a crawl space that you might be able to access through an opening in the basement foundation wall (see the window well in the foreground of the last photo -- hopefully there is one like that that opens into the crawl space under that bump out). If you can get in there, or at least look in there with a bright flashlight, you should be able to tell whether the wood floor structure (sill and joists) of the bumpout shows any deterioration or not. If not, then it is the brick wall settling. The ultimate solution would be to jack up the bumpout, and put in a whole new foundation (proper footings below frost level) under it. How are you with a shovel?