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The facts that you describe suggest a possible "Act of God" and, unless you had any langage in the contract saying that you were entitled to a refund in the event of an Act of God, you have no legal recourse for a refund.
As frustrating as it is, the most you can probably hope for is the $500 they were offering you. I know that hindsight is 20/20 but this is one reason some people buy wedding insurance -- you just never know what can happen!
Good luck and best wishes for better days ahead. I hope that you find this information to be helpful and this answer to be ACCEPTable!