I wouldn't be the bit surprised if he has me paying for the new spindle. He already won't pay for the car I am renting until Monday and the $100 towing to his shop.
Okay, so you've spoken to the mechanic, and I'm guessing you were nice about it. These were sound enough steps to take, though being a dick
might have yielded better results. He is taking an adversarial posture.
The thing is, there is no way this is not his fault. He knows that. His attitude is an attempt to intimidate you into rolling over and shutting up. I'm guessing if you have him fix it, he will try to charge you full price for the additional work. Meanwhile, he can hide the evidence of his mistakes.
I think your next step would be to contact the mechanic (if your car is already there, go there in person, if not, you can do it over the phone). Tell him,
nicely, your lawyer advised you to take the car to a different shop, document all damage that has occured, and file a lawsuit againt him and his shop. Tell him that's more hassle you want to go through and if he just fixes the car and reimburses your expenses (towing, rental car), you'll be more than happy to just put it behind you.
There's an even chance he'll go for it, if so, great. If not, your next step depends on if the car is at the shop or not. If it is,
do not leave, call a tow truck immediately (you may want to have a cell phone on you as I doubt he'll let you use his) and have the car removed from his lot. Stay with the car until the tow truck arrives. When the car is off his lot, you can follow the steps outlined in the above paragraph. It might also be a good idea to call a lawyer at that point. Be sure to keep records of all expenses, including lawyer fees.
I forgot to mention that I think the wheel started wobbling right when the grinding noise started.
That is to be expected. As the metal was lost it created excessive clearance, causing the wobble.
If I jack the front end up, will trying to manually wobble the tire/wheel be enough to diagnose a spindle problem?
No, the only way to determine where the damage lies is with disassembly and inspection.
Sorry this is turning out to be such a pain in the ass. Unfortunately, there are all too many bad mechanics out there, which is why it's so important to treasure the good ones. Good luck!