Buying a home but the septic inspection failed in New Hampshire. Now seller wants to fix but increase price by 60k

Long story short, the seller sold his other property so he has a down payment for his new home. It means he does not need to sell this one - he can be patient and put it back on the market.

After we paid for the septic inspection, the septic failed. We requested the seller fix the issue, but he came back and said he'd fix the issue but add 60k onto the sale price. The septic cost is only 20-30k.

Looking back at the disclosures, the septic area is blank. He only mentioned there is a leach field, but left blank items such as "date of installation of leach field". The leach field was flooding and the septic inspector told us it was the worst septic failure he's ever seen.

Should the seller have disclosed more information? For example the septic is overflowing and there are 12 people living in the house (him, his wife and 10 children).

Apologies for my ignorance but we are so lost at what to do and we have 5 days to respond to his 60k price increase.

Thank you in advance!

EDIT: Thank you so much for so many responses! After much deliberation and suggestive help from you all, my wife and I are deciding to eat the cost of the inspection and walk away from the deal. He's a local pastor and selectboard member so anything legal in small town New Hampshire, for example he knew the septic was bad or anything else is in bad faith is impossible to fight this guy has legal pull.