Oh, sorry to hear the build went belly-up so near the final stages. Are you sure if couldn't be salvaged? I mean, even if you have to strip the paint from where the decals are, redoing those areas wouldn't like [i]that[/url] huge a project to me.
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But you're way past that stage. I don't know of any way to remove damaged decals without damaging the paint. And damaged paint almost always means stripping it down to raw plastic, as there just isn't any way to control the process or keep it localized.
Depending on the decals, soaking them with Micro Sol might work. And then there's the option of trying to pull the decals off using tape, but that carries the risk of lifting paint along the decals.
Yeah, some paints sand OK, while some (mostly acrylics) sand hardly at all, prefering to flake off instead.