I wouldn't want a dent there since it is about the most important point on the tube. However, if I had done the denting, I can't imagine I would throw the frame out and start all over. I don't think it will actually break on you. The dropped fork explanation is convincing enough and not a shattering load. I assume he hasn't cut the fork on this one. Best check.
The problem to me is the price. If you are in Canada, this would be an opportunity to save some shipping and get a cheap frame. In the US, with what they cost new, and where the price is now with 3 bids and 3 days to go, I would be surprised if it stayed a good deal.