Not overpriced IF it is in good shape, but on the high side. I bet you could get a better deal if you let him sweat it out for several days.
The '94 transmissions are an updated version of the C-6 transmission which has a splendid track record. It has an overdrive and I think a locking clutch to help with fuel mileage. The truck was very likely a rental truck (Uhaul, Ryder, etc.) which would explain the paint to cover up logos. Do you know the saying, "Drive it like you stole it!"? A better saying would be, "Drive it like you rented it!" Funny, but true! Be aware of that.
However, fleet trucks have excellent maintenance schedules, which would help a ton for the one-ton. (lol) Two things that kill auto transmissions are poor servicing and heat. While rental trucks are highly likely driven hard, they are serviced well. Perhaps the miles were more highway miles. Look for a transmission cooler; that would be a plus.
At 200,000 miles, you are going to see some repairs. Heater core, tie rods, wheel bearings, etc. Stuff that most people don't think about until they fail. That is not a deal breaker by any means, but something to be aware of.
If he replaced the transmission seal, did he notice the leak and fix it right away or did he wait until it started shifting funny and only then noticed the trails of oil leading from the driveway? Look at his driveway if you can.
He replaced the water pump and thermostat. Did he drive it until it was boiling over and wonder, "Hmmm. Seems to be getting hot. I better drive home straightaway and see what the dealio is?" Or did he notice the gauge riding higher than usual and fix it before it got too hot? See if the insulation under the hood above the radiator cap is saturated with coolant. You'll be able to feel the oily residue. It may also have coolant sprayed in nooks and crannies he didn't clean well. You may be able to tell if the intake manifold was recently removed (cleaner than rest of engine). If so, run away.
I'm cynical with most owner's neglect of vehicles and rightly so. You should be, too, as this will be your home.
I wouldn't bank on the engine being a 460. That is most likely, but a 351 is not unheard of. I would identify it first hand by comparing the valve covers. I can't remember the differences off-hand, but the info is on the 'Net. Even if it had the smaller engine, it probably was mated with the stronger transmission, but check that out, too.