Mole, plenty of guys are willing to donate/sell a car cheap to a team they are going to be on or that they might end up being on. This ain't going to help your case and even mentioning anything about this is going to get the BS meter rolling.
You would have been worse off if the guy had been there on your team whether you paid $500 or $700.
I am not the best person to explain to you the finer points of knowing when to keep your mouth shut but you should have done it during BS and now might be a good time too.
Next time you buy a cheap car for less than the advertised price, which will pretty much be every time, bring an add listing. Have a Bill of Sale for the actual price you paid. Do not get the current owner involved in being on your team unless you are paying the listed asking price and even then you might want to be quiet about this.
Other good ideas are to photograph the car as you first see it and get pictures of the included cheaty parts. Somehow I never end up with my camera at the time of purchase and it's usually at night. So get pics of your new prized turd early before you start doing anything with it.
The sooner you get over your BS inspection, the more likely Jonny might forget about it. At this point, I think it's seared into his gray matter so you're screwed.
So how about them eBay coil overs?
Troy
#35 LRE
1973 Datsun 240Z