Do you still have the original emails?

You can definite go public, such as local newspaper, TV, or even campus news. Student bodies can sometime be quite liberal/noisy on these issues. I know personally such groups successfully overturned a tenure case.

I don't know about a lawsuit, print out the emails, highlight the time line and see a lawyer. If you can prove the prof lied to you about funding, then there maybe something you can pursue.