First, $400 for a Model 14 dash anything is a good price if it is in shootable condition. The Standard Catalog of Smith & Wesson show it to have been made in 1966 near the end of production of the dash 2 variant.

The picture you show is far better than the 80-85% condition you mention, rather it looks to be 95% or better, at least on that side. If the cylinder is free of slop and both comes up to position crisply as the gun is cocked or fired double action and locks up tightly in firing position as it should, you have a winner. I question the presence of “a little flame cutting” and would suggest you’re probably looking at the little divot in the bottom of the top strap just above the barrel-cylinder gap. The factory machined that in when it was made.

As for ammo, if you have virtually any mould meant for use with 38 Special use, that revolver will consume it, but for best accuracy and longest life, mild loads behind a wadcutter or semi wadcutter weighing between 145 and 160 grains will probably be best. I shoot my K38 (pre Model 14) with 148 grain wadcutter (double end or hollow base) and 156 grain semi wadcutters over mild charges of Bullseye, HP38, or 700X .

Enjoy your new acquisition!
Green Frog

PS the “3 Ts” (Target trigger, hammer and grips) make that a premium version. The grips alone are probably worth about half of what you paid for the gun!
I just went back and noticed you haven’t posted since 2011. Welcome back. How did the 617 and LadySmith work out for you?