Umm, something sounds fishy there. "I didn't want to change the gasket so I just changed the engine instead" = the engine is fubar'd I would be kinda concerned about the crack in the oilpan as well, buyer beware!
If you want a boat anchor, it might be a good deal. Maybe he should just say: "I jumped a curb and busted the oil pan so this engine burned up, then I replaced it but thought some sucker would buy it anyway. How about an X-Box box to go with it?"