I paid only $400 for a complete running 230 with trans, but that was about 20 years ago, and the engine and trans worked but were far from perfect.
So, nowadays $350 might buy you a running engine, but perhaps with serious issues (bad block, cracks, etc) or a good rebuildable core, but I would't expect to get one that didn't need lots of work for that money.
That being said, if the ad clearly said "a good running engine" I'd have expected to hear it run, or get some kind of guarantee from the seller.
If he wrote, "it was a good running engine" and that it had "been stored 10 years" then I would expect it to need a rebuild from just getting rusty sitting.