Are they offering up any kind of a warranty with that $1000 engine? I would at least ask, or request they look through it & inspect it for that amount of money. It doesn't hurt to ask... It also doesn't hurt to drive up there with $600 to offer & see if they'll take your parts for the rest of their asking price.
Their price on the "rebuilt" 235s are good/fair prices if they are guaranteed/warrantied and are 100% full rebuilds.
Brad