I haven't seen V8 prices drop around here either. The only thing I have seen though is 4 cyl prices going up. I just looked at another '91 here in town for sale for $600.00. It had a bad motor (no details just reading the sign in the window), cracked windshield, rust blisters on nearly every body panel, but it did have a nice set of 4-lug Centerline auto drags, and a very clean grey interior. It was an original Ohio car which explained the rust, and made me even more wary of the underside of the car. The sign said the owner had another motor to go with it but didn't say if it was part of the $600.00 package.
All in all, it was a parts car at best. The grey interior panels, wheels, 5 speed, roller valvetrain, and a few other parts would have been worth trying to keep or resell, but I wouldn't have messed with the body, and I wouldn't have paid his list price.