Big Ray, it's good to know their is still some good folks out there. This one is a tough call and only you can make that decision. Selling a racing motor "as is" is a hard thing to warranty.
this one is your call and I applaude you for helping the guy out.
I have a friend right now dealing with a messed up motor ( 706) that was suppose to be fresh. He broke a lifter ( which happens) but the motor has 8 cracked pistons (in the wrist pin area) and the worst part about it is the crank is still hitting the block. This motor came from one of the biggest names engine builders that there is.
The only complete motor I've ever sold was a really nice 548. I kept in contact with the guy (he was from PA. ) until he made a few passes. I wanted to make sure it was what he expected it to be. He was really happy with the motor and said it was faster than his 565 that he just hurt.
I had the motor built from scratch and all brand new parts, but it broke a lifter shortly after it was build. I had it in the shop warming it up to check the valves and I heard a slight squealin noise. I looked into the motor and saw several lobes on the cam messed up. All I had to replace was cam and lifters so I got lucky on that one.