Not sure how one entirely wears the finish off a gun that couldn't be any older than a few decades. It would be helpful to get a born-on date for it, that may be difficult. It is getting very difficult to get parts for the early models, as I am learning with my Model 12.
Without a hands-on inspection, it would be hard to gauge. Sounds to me like it was abused in unusual ways. I would really give it the once-over. It could be that it just needs a refinishing and it is mechanically sound. However, I think the more likely scenario is that it went to rust and someone attempted to correct it.
Bring a mini-Maglight.
Based on your description, I would offer $50 and be promptly thrown out of the shop.