Hard to say without a chance to study the gun or look at photos, but I would find it hard to shell out more than about $600 for what I see in my mind's eye based on your description. That's still about three times what I would pay for a contemporaneous .38 in similar condition. Others here might have different numbers in mind.

If you are thinking of this one as a keeper, I would say that refinishing (which I usually oppose) is not a horrible idea. But go to a real gunsmith, and not some strip and dip operation that doesn't know which pieces of a S&W were blued or nickeled, and which were case hardened. That gun will never have the value of an original .32 M&P again, but with the proper treatment you can keep the value from declining further. And if you are thinking of it as a family heirloom rather than an investment, there's less point in preserving it in its present abused condition.

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David Wilson