It has recently come to my attention that our house was built on a
toxic waste dump.  Unbeknown to myself, people in the area were
getting cancer (as well as myself).  Also people that would stay at
the house were getting randomly getting sick (colds and flu), and my
mom has had a chronic pain disorder called fibromyalgia and she is
constantly sick.

My question is what liability do the builders (if anyone) have in
this, and does a person have legal grounds for a lawsuit when health
related issues arise.  I think 7-9 years back a notice was sent with
the information...but I got cancer 5 years ago, and had to undergo
surgery and had chemotherapy.  Do the builders have to buy back the
house if we bought the house without this knowledge?

My question is where can we go from here?  If we sell, we have to
notify the buyers correct?...which will severely decrease the value of
the home.  We are located in Northern San Diego, and just want answers
on what we should do.

My mom recently sent in an environmental test, and we should be
receiving the results soon.

No Google Answers researcher can really answer this question for you.
You need to contact an attorney who will spend a great deal of time
collecting the facts to make a decision as to how you can proceed. 
Hire an attorney that is trustworthy and has a good reputation and
insist on the case being on contingency (he gets paid if you get
paid.)

What type of toxic waste is being dumped there? The type of waste will
mean the difference between different illnesses.