I don't think that I would even tell him I was getting a lawyer, I would just get one. If your foundation is eroding, my question is, where is the water coming from? If there is no help for the water coming from there, then why was there not any drain tile put in place to control where the water goes and the damage could thus be limited?
As for the lights, if the manual says that there should be enough wire to place them on the deck to change the bulbs, and he did not install them correctly then he is not living up to his end of the deal. As for him cracking the pad, I would think that he should bust it out, and repour it for you, and while he is at it, he should pressure test the plumbing to check for leaks.
Get a lawyer, and videotape everything. If I was ever to pay someone to do anything major for me, I would probably video tape daily, at least it will be available if you need it. So far though, I just do it all myself, coming out of a construction background though, nothing really phases me yet. I have never messed with an inground pool though, I would imagine that should it ever be desired, I would just research it and do whatever I could myself.