4 weeks past guarantee. How to handle refill due to medical condition?

I really need some help here and scenario is as follows:
*We are 4 weeks past guarantee and just learned that our "perfect hire" is leaving the company due to a cancer diagnosis. Original fee was $15000.00
*Met with client last week. Client expressed his satisfaction with our process and commended us on finding such a good candidate---only negative feedback is that the hire is now sick
*We expressed a desire to help the client due to these unexpected circumstances and presented the following proposal for a refill:
*We will refill the position for $4000.00; $2000.00 of which would be credited to their account and applied toward the retainer on any future searches.
*Feedback on our proposal was negative. Client does not feel that we are doing enough (in spite of the expired guarantee and the validation that we had placed an excellent candidate).
*I need feedback! Did we not go far enough to help the client? He wants us to submit a better refill proposal and suggested that $1000.00 would be appropriate. Where do we find the balance between helping a client due to unforeseen circumstances and covering our costs?
*Help!

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