Well I'm in on this one late as I see they hashed it out...but after reading through this thread Two things are certain.
1) The truck wasn't what was advertised and there definitely should be some compensation.
2) I would never in a million years deal with Tony Litell after reading the ridiculous compensation he wanted prior to reaching an agreement with the other guy.
If you are not capable of yanking a small block chevy out of a truck and reinstalling another sbc then you need to find a different hobbey....$1000 to remove and replace a sbc? Wow. That's a one afternoon job. I would miss work for that gig any day.
I think $500-$600 would have been fair compensation for the difference in 350- 400 ci