Honestly, I wouldn't trade. If the guy wants your car, tell him to sell the bike.
What is your car really worth? Is it a car that would have sold for $8k a few years ago, but because the economy sucks it's now worth $6k? Or has it always been worth $6k, and now you want top dollar even though they sell for $4k? A few years ago, a 2003 RC51 would average around $7k, now they are probably averaging about $5500.
There might be a reason that he hasn't sold it (if he has been trying), something that a more experienced rider would pass on. If you are set on trading for it, please please please have a local Honda shop take a look at it. It probably won't cost more than $100 for them to look it over, and if he won't let you have them look at it, pass on it for sure.
Things like this can, and do happen, and there are shady people out there looking for suckers. This guy bought this bike without knowing that the damage had been done. If he didn't have access to the kind of machinery that he does, and the skills to do this repair, he would be forking out cash for a new set of cases and the work to replace them, or the motor: http://www.speedzilla.com/forums/rc5...lding-rod.html
RC's are big and fat and expensive to repair when they go down. Each plastic panel (nose, left & right side, and tail) are over $500 new, about $150-250 in good used shape Tanks are over $600 new and can go for $400 used. If you lay one down, you can consider yourself extremely lucky if you only damage two panels/tank. Most times you'll hit the nose, side, tail and tank due to the way the bodywork sits on the bike and it's shape. The tail, tank, and nose are much wider than newer bikes.
If it checks out and you still want it, I would keep it in the garage for a while and spend $1500 on beater ninja 250 to learn on. After you get comfortable enough to ride the RC full time, you can probably sell the ninja for what you bought it for, keep it around for kicks or the lady friends, or turn it into a beater track bike (which is probably a good idea if you want to head out to the track on two wheels)