We had a similar experience: a California 82 Westfalia with high mileage.
Owners
were asking 3500 and we bought it for 1200 Why? Because the engine was
shot and through a third party it was agreed that the engine did require
repacement. Both the interior and the exterior  were in great shape, so it
came down to the cost of replacing the motor (about 1500 exlcuding
sundries). The message? Anything over 4000 is far too high for a vehicle
of that vintage and mileage.We shopped around extensively and did see
Westfalia's of that period selling for under 3500 all in good shape.

Your best bet is to pay the 50 dollars and have a mechanic look it over
for all the points you mention but especially big ticket items (manifold,
exhaust system, oil leaks, suspension, brakes, and of course compression).
This will be your only bargaining chip.....good luck. DC 

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David Carment
School of International Affairs
Carleton University
Ottawa, Ontario
K1S 5B6
voice - (613) 788-2600-6662
fax - (613) 788-2889
Email address: dcarment@ccs.carleton.ca
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