Not the first time a situation like yours has come up, and unfortunately it won’t be the last. Appraisers can only use comparable sales that are available(nearby, sold recently, and similar homes), and sometimes have to go outside the recognized market area for a home to find comparable sales. They usually include an explanation for any variation from standard underwriting procedures such as going too far for comps, using older comps, or homes with significant size or other adjustments.
Once appraisal has been submitted, it’s the underwriter’s call to accept it, reject it, or ask for more or different comparables. Occasionally a field review appraisal is ordered, basically a second appraisal to confirm the findings on the first. You don’t allude to this happening in your case, somewhat surprised if appraisal was rejected without either a desk review (in house appraiser reviews original appraisal), or field review.
Bottom line, the previous appraisal used comparable sales that are now completely irrelevent, and the fact that your house is “supersized” will make any appraisal problematic. I don’t see any recourse, unfortunately underwriter’s job is to protect the lender against undue risk and verify that loan and appraisal meet all Fannie/Freddie/HUD requirements. If an appraisal does not do so, and additional comparables cannot be located to satisfy underwriter’s judgement, loan will be denied.