The airplane doesn't scare me as much as the seller does. Here is a guy who is either a) A pretty major liar or b) so clueless as to aircraft ownership that he has no business doing so.
If your pre-buy didn't show appreciable defects and you like the plane, I agree with the others...make an offer befitting the condition and history of the plane. State your findings to the seller in a non-confrontational manner and indicate that for these reasons, the airplane is only worth $XXX to you. I would also run a NAAA Evaluator appraisal and print it out, because I bet it will support your value (available free if you are a trade-a-plane subscriber...or find someone who is and will do it for you).
Then you will keep $10K in your pocket for those expenses that will come up later (and always do).
