What do you do when a project goes sideways and you know you’re not going to be able to meet the customers expectations?

I’m in the middle of a woodworking project for a client, and literally every step has been a disappointment. The biggest issue so far is that a stain color won’t match existing trim in their duplex, but now there are a few other project specs that I just don’t have the ability to correct. The project will end with them being disappointed and I am at 100% stress knowing that whatever I do will not make them satisfied. I’m actually losing sleep on this one. They’ve been patient and kind, but this is not going to be a high mark for me, and I don’t think they’ll feel good about the outcome.

What would you do? We’re not too deep into materials cost yet (I.e. < $1k) , and I could conceivably put things back the way they were. Do I eat the labor and put it back the way it was and walk away?