As you're in NM the rust will spread much slower than in a rust prone area so if the frame tap test isn't terrible you can repair it and the parts are available. That brush guard is better on a Denfender so you migth be able to sell it to a Defender owner to help cover some of the repair costs.
The leaks are probably just old seals and a new set will keep those leakes down to a mimimum. My 64 IIa has good seals and it might leak a drop or two after running it a lot. Be sure to also check the swivel balls. That is a nice looking series from the pic, if the seller will work with you on the price it might be OK. Having the knowlege to talk to the seller about why you feel it's not worth his asking will help.
~Matt
97 Land Rover DI SD 5 speed- Camel Trophy-esq build
06 Toyota 4Runner (I've got to get to work somehow..)
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64 Land Rover Series IIa-88 The origin of the insanity, gone to live on a farm in Virginia.
It's not the destination that matters.