Assuming you do all the rehab work yourself, and are good at managing the $$ on supplies and consumables. The 420 is the bottom of the touring line, but the bottom of the vintage Trek line is still pretty good. Touring bikes enjoy a nice premium, as do steel Treks. I would have been happy to pay that price, even here in "Hooterville". Smallish size is a plus as well.
Bike is being poorly marketed. With some fresh parts and a good clean up, and a great ad, its a money maker.
Darn, I thought at the time it probable was a good buy. The market here on bikes over $200 is very soft. That guy is dreaming at $225. It would probable have to be listed on ebay, which I'm reluctant to do.
+1 on what Thrifty Bill said. I have sold 2 420's, a 420 Mixte and 2 720's. Here in SoCal in completely rehabbed condition the 420's fetch about $300. People will drive a good distance if they see a Trek touring bike in their size. Folks want them in good condition.