My guess is there is something profoundly wrong with it. Otherwise it would have not made it onto "Gov. slimeballs". I believe there is a current re-manufacture program for LMTV's going on, so if its not going back for re-work...there must be wopper of a problem with it (Besides the Allison MD7030).
But with the current bid of just under $25K and 2 days left on the auction...there are people that obviously think otherwise.
That's what I figure, too. The truck has to be bad enough that virtually every government agency doesn't want it for any reason.
Interestingly, though, the passage of time has resulted in a 6-figure price drop in the one S&S LMTV I know of that got into private hands non-surplus, the "Bad Boy":
It's now down to $150K at Creative Mobile Interiors, which is a fair chunk of money and twice what the truck many would think of as a competitor, a used U500, costs. But this has had a lot of high-quality custom work done, has low miles (it's been for sale for years), is one-of-a-kind and is ready to drive. And figure that it cost the taxpayers a whole lot more. It might not be out of the question as the basis for a camper with a really big cabin, very similar dimensionally to those Darrin Fink made out of his modified Fuso FMs.
And it's what you want to be driving in case of nuclear/biological/chemical attack, due to some special air system that Homeland Defense Vehicles, the company that CMI modified it for, installed. However, HDV's anticipated customer base much have been insufficiently paranoid, as I think the company went out of business about five years ago.
Interesting links here:
http://www.usatoday.com/money/autos/2005-02-14-truck_x.htm
http://creativemobileinteriors.com/sections/sale/BadBoy/BadBoyindex.asp.