If he'll let you take it home and try it, and return if faulty then that is OK. Did the fins blades show any sign of tip damage? Or can you get it to scrape the housing when turning with the fingers? If not, then when gorged with oil it will likely as not, run fine.
intercool it, that's what intercoolers are for isn't it? to catch all the pieces of your blown turbo before they enter the intake
Thats not too bad a price. I'd buy it, oil it up and run it easy for like 5 miles. After that it will most likely last a good while.
Thats not that much play at all. The turbo has sat for a while, and does not have any oil between its bearings. Normally it will be pressurized and held in the center of the housing.. Check this out; http://www.vwdiesel.net/forum/index.php?topic=21899.0