The HG problem is basically a hit and miss, some have never had problems, while others have had to replace the HG 3-4 times. A lot of the repeat HG jobs were doto improper repair, i.e., reusing the headbolts, or putting warped heads back on. Since the job was done by Toyota, it is probably not going to be a problem. Also since the dealership mech has already stated it as a good rig, there shouldn't be much issues down the road other than regular service. The 3.0's do tend to get burnt valves, I have had 2 on mine since '98, no one can lock down the exact problem, there are several different theories as to the cause.

A stock rig that clean here in CA usually sells for about $1500 over bluebook value, so at $10k, it isn't all that expensive. The upgrade parts new would run about $6-7k, depending on who did the labor. Normally you can get back about half of what you put into the rig, so a reasonable price for the rig that clean would be $10,500, just what he is asking. If the gears haven't been changed I would offer him $9500 including the winch and bumper. Though before wheeling it much it needs a good rear bumper, and some rock sliders to keep it clean.

This "90 X-cab would also be a good rig if he was looking at wanting to build one of his own.