Gotta say this '77 is even more beat up than mine! I may be jealous...naw. It may be a tone monster, though--mine sure is! I like the improved (at least, newer) tuners...that's a beef I have with mine. I think $500 is a bit high for one in this shape, though. I'd offer 375, too and hope to snag it for 450.
Ok, I am no expert but I went by and took a look. Pictures to me seemed worse than the actual guitar. Neck looked fine. Sounded really nice. If I hadn't just bought a D4 I would have bought it for tone alone. There is crazing on the top.