Failures happen. On the CFI initial it's about a 70% first time bust. Learn from it, move on and kick the crap out of it next time.
I don't agree with this DPE at all though. The CFI is all about the books. You know how to fly, you've demonstrated that. With this one you're demonstrating that you know how to teach. WIthout the supporting resources how are you able to justify what you are presenting?
I'd give the FSDO a call, see what their schedule is like. Paying that much for a checkride is beyond stupid.
OH yeah, I failed my initial twice. It hasn't held me back yet.