A Cannondale bike without the ATK upgrade and branding is worth about $800-1000 im my opinion. To upgrade the engine you are looking at about $500-700, assuming you have the Cannondale without any of the engine or ATK upgrades to it.
So a blown Cannondale is worth about $200-700 as far as retail. Of course, just having the suspension parts is worth more than that; I'd say abovut $1000.
Rebuilds are harder and harder to do, esp if it needs a crank. ATK which rebranded and bought all of Cannondale parts has but a few cranks left for these bikes and they are no rebuildable cranks so you can't rebuild it or have a shop rebuild it. Complete engines for these bikes are hard to find and are about $800-1200. Try cannondaler.com or the ATK Motorsports forum (do google search with those terms).
If I were you I'd offer him $800 and look for an engine or part the bike out and keep the suspension components like I did.
2001 Yamaha TTR-150L
1998 Buell White Lightning