What's A Good Price For This Car?

I'm looking to pick up a project car and came across this on craigslist.

It's a 2000 Mustang GT 5spd Convertible
200k+ miles(didn't specify how many exactly)
Blown engine(seller didn't specify what exactly is wrong, emailed for details)
I'm assuming it's a little rough around the edges with the amount of miles but he says in the add that the body is in "good condition". I don't know if it has a good title or salvage.
He's asking $1300.
I don't have any pics, but I requested them in my email.

Here's my figuring. Let me know if I'm on the right track.
KBB says if it were operating that it would be worth ~$3000 in fair condition.
Without more details I can only assume that the engine is total garbage and needs completely replaced. So that will cost me ~$1500 for a used motor. With this high mileage it will undoubtedly need more work. What kind of work, I don't know so if you can tell me what else to look for and anticipate I would appreciate it.
So assuming a new engine the value is down to $1500. Miscellaneous other work could cost much more. It's going to cost me $100-150 to rent a truck and trailer to tow it so I'll factor that in my offer. Assuming that everything else looks good I'm thinking $800-900 is a good price to pay. I think I should walk away from anything over $1000.

So to reiterate...
What else should I look for and ask about?
What's a fair price to pay if it's only the engine that needs major work?
What would the OTHER things that are LIKELY in need of work be and what would they cost me(I'll do the work myself)?

I know this is a lot to ask (and a lot of hypotheticals) but if a few people can take some time and answer what they can I would appreciate it.
I'll update when he sends me more information.

Thanks

Mostly a weekend car just for fun. Cruising, shows, autox, drag...in that order as far as frequency.
First and foremost is to get it running so I can get it out of the garage and onto the street so my dd can go back in.