That paint job is hideous, but you can strip that. For $40, you did just fine.

I think job 1 is strip the parts. Job 2 is strip the frame. See what's under the paint. It might not be so bad. If it's out of round without any hints of indentation, borrow some frame blocks and roll it. It might just pop right back into round. You can try that with the little dents on the top tube, too. This is going to be an "expensive in time" to restore it to a rider.