A 1006 sold for under 500 bucks makes me think there's something REALLY wrong here. Dry cycle and fire the gun, if it seems okay, I'd get it. The finish could be restored and I think S&W offers that as a pay-for-service. Unless the frame is cracked or the barrel is bulged such you cannot draw the slide all the way back, I'd pay the money and get it. It can be restored so long as there's no irreversible damage to the parts.
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