+1 on never buying used engines, and if that is reconditioned....what did it look like BEFORE it was re-conditioned? I mean....it could have been a lot worse looking. I had my an upper conrod bushing shatter on a cold day and it tore up my Piston and head button. If I re-conditioned them...they probably would have looked on par with your pictures though.
So on that note...I don't know if I would call the seller a liar based on those pics, but I personally would have expected it to look a bit better than that....did you get pics prior to purchasing it?