Cons:
1) High mileage. Again, that's pretty much a given when buying a bus like this. The good news is that simple maintenance has most likely been performed right on schedule. Bureaucracies like to spend money to keep their budgets as high as possible, so they usually don't skimp on maintenance.
Having said that, it's still a lot of miles. Here's a look at possible expenses:
Transmission: This is a biggie, and you already know it needs work. You might be able to put in a shift solenoid and get the overdrive working again, but I would have it rebuilt. That's the 4l80e, which is a very strong transmission. It's the early version, too, which is the best one to have. An honest, complete rebuild should cost between $1500 and $2000, and should include all new solenoids and all the updates. This includes a rebuilt torque converter and removing/reinstalling the transmission. Any higher and you're paying too much. Any lower and they probably aren't putting in all the new parts they should.
I would use the known transmission issues for negotiating leverage. If you check the bus out and like it, try offering 28 crisp $100 bills and see what happens...
To me, the other serious high mileage issues are engine, differential and front end.
Front end: If it isn't shaking or pulling to one side or the other and the front tires are evenly worn (and you don't see uneven wear on 2 rear tires that could have been switched to hide the problem) then you're probably ok. Front end wear falls under routine maintenance for a school district, and that bus is probably on its third set of ball joints, etc.
The engine may have some life in it, it may not. If you want to know for sure, have a compression test and a leakdown test performed. An engine swap is a lot more work than a transmission rebuild. On the plus side, that is the most common V-8 engine in America and thanks to high volume parts are cheaper than for any other make. Then again, you may not care if the engine is tired if you don't plan to drive a lot.
The differential should be quiet. If there's any whining or clunking, you either need to find one in a junkyard or have this one rebuilt. The spring perches for the vans are in a different place than on the trucks, so good van axles can be hard to find in a junkyard. A rebuild might be preferable if you plan to drive a lot, and I'd have a limited slip put in at the same time.
Bottom line is that you can negotiate hard. Christmas is next week and most people need money right now. I'd rather pay less for a vehicle and then put new parts in myself. Then, I know exactly what I have. I've purchased several used GM 3500 trucks and vans over the years, and the transmission is the always the biggest question mark. It's an excellent transmission, but with that many miles you should expect it to be worn out. In this case, you know that and can use that fact to negotiate.
I don't really count things like tires, brakes and shocks, or starters or alternators. I usually replace those things arbitrarily just so I know I have a safe and reliable vehicle.
Good luck!
