Katie,
I have been following this thread as well. Most of us have gone through what you are. My story is not with a p-car, but its sibling VW. I was around your age (34 now) and was looking for my second car (not at same time). I was going to college a few hours away from L.A. but could get the Recycler (used stuff mag) and looked for the right VW Scirocco. I found it! it claimed to be a canyon racer and looked setup. They also told me it had cams - wrong answer, it did not. I even took it to a VW dealer for the PPI. Turns out the mech who looked at the car was the sellers friend. Story short, I ended up dumping as much or more money to fix the problem the previous owner caused. Good lesson for me. Would have been better to buy a "stock" 16v Scirocco and fixed up right the first time.
I am nowhere near the expert on cars, but from those pictures you posted, you will be looking at a lot of work and money to get that car road worthy again. And, as it turns out, it isn't even a coveted 'S' model.
If he won't let you take it to another shop for the PPI, there is something wrong. He should at least offer to take it (maybe for a couple of 6 packs) to a shop for you, if, there is nothing to hide.
Please think long and hard on this one. It will end up costing you a lot of money in the near future. If you do look at the car again, look at the underside up front. Look to see that the front clip and torsion areas look to be rust free and have no Home Depot clamps holding things together.
Anyway, hang in there. You will find the right car. It may not even be the right color, but if it is at the right price, maybe your grandmother would include some fresh paint in the color of your choice in the deal.
Dave