From your description, I'd say $650 is way too high. Perhaps about half that is a good starting point. It's not beyond reason that it'll take $500 to $800, maybe more, to get it in a very nice condition, ridable condition, maybe some less.
The outward condition is often a reflection on the kind of maintenance and care the bike received. I wouldn't be at all surprised to discover it needs the valve clearances adjusted and probably more than a couple of other items replaced--tires, chains, sprockets, fork seals, brake lines, brake repair--beyond what you've already mentioned.