Maybe the person just got it from someone else and did not look into it and thought he can give it a try.
Since the item is not, what he described, doesn't the law say he has to take it back? I would insist on him also covering your shipping costs, because it was not your fault. He could have packed it better (styrofoam under the middle of the bottom, so that the feet have room to not make contact to the paper box already). The HDD is a no go anyway.
If you will loose any money in refunding it, I would talk him into giving you refund for the HDD (like the price of a working used one) plus a small bit of money more for the defective case and the trouble you now have.
You then can sell the Mac without hard drive (just be patient, if you do it via Craigslist) for a price at least equal to the rest of your costs.
Then reinvest into a DC G5 (or maybe quad), though a DP G5 gives you a wider graphics card choise.
Bend legs are seen quite often after shipping. I also think that most of the water pump problems in used G5s (Dual 2,5 DP and 2,7GHz DP and Quad DC) come from bad shipping.
He said he posted the 'about this mac' to prove that the hard drive was working, which seems kind of fishy to me to be honest. He is looking into possibly refunding me the price of the hard drive as it is on Newegg ($55), which would be more than enough for me.
If that's the case I will just grab a 500GB HDD from it, load Leopard on it and live with the minimal case damage.
I agree, I would have wrapped it in bubblewrap and then styrofoam then boxed it up. But that's what happens I guess. It looks like he may have even had FedEx box it for him, which would make even more sense since FedEx has failed at just about every other thing for me.