I say give him an honest chance...you bought it in person,
if you didn't see any issues maybe he didn't either, the only way you found the problem was taking it apart,
and it sounds like he didn't have it apart right before trying to sell,
don't forget these bottom ends are getting very old, and what you found is very common on a 25 year old race machine,
what you got was the average $400 to $500 bottom end, if you payed more then yes he owes you some coin!!!
but if that's about what you payed, then he probably knew as much about the problem as you when you bought it,
ask yourself if you would have known about the issues if you didn't split the cases, probably not, and he might not of either,
me, I expect thing like this to be wrong if buying low cost parts, but not if spending top dollar,
how much did they cost you?