Who is responsible for major repairs on home purchase?

As to the home warranty: a warranty is a contract; it pays for those damages or costs, and only those damages or costs, which it states by its plain terms it will pay for. Review the terms of the warranty: if you believe that they should pay here, you could sue them for breach of contract, or not honoring their contractual obligation to pay when they should. If you can convince a court that under the terms of the warranty, they have to pay, the court can order them to pay (issue a judgment in your favor).
Similarly, insurance is a contract, too: the insurer has to pay when, and only when, the terms of the policy indicate they should. Review the terms of the policy vs. the circumstances or facts in this case; again, if you believe they should pay but are not, you can sue for breach of contract to enforce their obligation to pay. Note that while you must review the terms of your specific policy, generally, insurance pays for sudden damage from an external cause (e.g. storm damage), not due to a general environmental issue (high water table, type of soil, etc.) or from bad construction.
As to the seller: if the seller knew or reasonably must have known (any seller in their position logically must have known) of the water problems, which are a "latent" condition (one not readily discernable to a buyer), but failed to disclose them, that could very likely be fraud, and fraud would provide a basis to sue the seller for the repair, etc. costs. If the seller did not have known and would not reasonably have been expected to now (e.g. they only owned it briefly before selling or "flipping" it, and so may not have enountered the problem), they would not be liable.