I have to agree, that's a lot of problems coming out of one cattery so I understand your hesitation. Has the breeder screened her breeding cats for HCM since you notified her of Servo's diagnosis? It sounds like she is still using the cats, even after knowing that Servo died of HCM, or am I misunderstanding?
As for the other breeder, it seems she is not well known in the community, but that doesn't make her a bad breeder. Talk to her, ask her questions, ask to see her contract. Ask her what she wants to know about you (a reputable breeder will screen potential customers, and many have pre-adoption questionnaires they require to be filled out), ask her if her kittens have had any health problems in the past, and ask her for references.
Don't jump into something into purchasing a kitten just because it's available and at the right price, but if you feel that connection with it after seeing the pics, then go for it.