Well it sounds to me like you are stuck at $400.00 for it.
I wouldn't pay that for it. First of all, I couldn't afford it at that price, and secondly, she obviously has figured out she has someone who will pay that for it.
The threats about the backhoe and the other guy offering money may be real or just threats. Either way, she has got you hooked.
You just have to make up your mind whether you will pay that much for it or walk away and wait for six months or a year.
I wouldn't pay anything until I could see it myself, and take pictures myself, and hook up something to see if it will even work.
That way you will know where it is, you will find out if the motor works, whether there is any damage etc.
Also take cash money with you and when you are ready to deal, make the offer you are willing to live with and hold out the money spread out so she can see the green stuff.
If she doesn't take it, thank them, and walk away.
Think about this, they are not going to destroy something that might net them at least $100.00 or more, unless they are totally stupid.
Also, if the other guy is willing to give them $500.00, why isn't it gone?
When you hold out the money don't say another word. The first one who talks loses.