It appears that your bad credit is causing all this. The finance company is saying they cannot approve your loan unless you make a $1000 down payment, regardless of what you signed. If you can't make the down payment, you must return the car, which still belongs to the dealer since he hasn't been paid for it.
There is also the possibility that the car is not worth the amount of loan you want (you are paying too much), according to the finance company's "black book" of values. They won't lend you more than the car is worth. Anything more, and you'll need to make up the difference with a cash down payment.
You could try to get a loan at a local bank or credit union but with your bad credit, you may run into the same problem as with your dealer's finance company.