Ironically, I had a very similar situation just a few months ago. I had agreed upon a set price for some work that I based on how long I estimated it would take. I didn't take into account the multiple rewrites I'd be asked for. Luckily I did stipulate an ending date for the project. I don't know if they found someone else to finish what I started, but as I had another project starting, I had to close the book on that one. It sounds like Les learned from his mistake and will have a clearer contract next time.
Not exactly a horror story. But it was a matter of agreeing on the design. My client suggested that we would "work together" on it. She was very picky about some things. The upshot was that she would review the work I sent to her (or temporarily put on my own website). This might be fine for a hourly contract. But I had stipulated a particular sum as what I would charge. So when I would get the call: "gee, I don't think this will work," I started getting nervous. How many times would I need to revise things. I also did a special pop-up calendar on my own initiative. My client didn't like it.
I got some solace from an about.com article specifically addressing the need for agreement up front on a graphic representationn of the web page to be designed.Of course a contract is also very desirable. Although my client, an acquaintance of mine, would not consider a contract full of legalese; I wrote my own in everyday language that paraphrased a contract I found on the web. I consider the experience--my only professional site so far--to be a positive one overall.