I am in a similar situation, in that my deposit was (luckily) with the TDS, however no one will help me get it back. GDH say its out of their hands, even though I handed THEM the money. I have filled in a form to claim it back, but really dont know whether they will pay out. Im just waiting.
You must seek legal advice though, perhaps start with the Citizens advice? They will speak to you then make you an appointment with a specialist, which may help. You must not give up though, I wont! Its a lot of money. Your LL probably doesnt want to take responsibility, because he never had the money in his own account (mine as said a similar thing, so Im trying to sort it out myself). Also, I think many LLs have not been receiving their rent for the last few months, so he is probably already owed a few thousand and thats why he is trying to not get involved.
Out of interest, when did you move in and pay the deposit? Because the company has 14 days in which to register it in a scheme and provide you with evidence of this.