I don't know. While driving from home to the office I thought of some stupid, smart-assed response to your dilemma (that probably would only be funny to me) but, now I sense that you're truly struggling with it.
The best I can think of is to be honest and say something like.
I really thought this project would be a good fit and I took it on in good faith and with the best of intentions. It turns out that you'd be better off with a different artist so I'm withdrawing my services. I realize that this will put you in a bad situation at this late hour and I apologize for that.
Sorry, Blob, I wish I had something better but this is probably the way I'd do it.
No, that's pretty good stuff. Thanks. I'll probably use some of that.
The worst part is that it will probably come out of nowhere for him, because they said they liked what they saw and gave some changes, but the changed needed amount to redoing the entire thing from scratch, and the thing is, I struggled because I was trying to stick exactly to what they wanted and still got it that wrong.
From their perspective it's going to look like-
"That's good, but fix these few things"
*waits until deadline to reply*
"I quit"
Which will probably look like an overreaction to minor criticism, but it was a matter of at that point realizing that the way I think and work isn't going to work with what they need.