Hi Steve,
It's an exciting time for you... looking for your first Pagoda SL.
kampala makes some good points above, it all depends on what's important to you. I'm a 'driver quality' kind of guy, I don't have huge money and don't want a perfect car, or the stress that owning one would give me, so I understand what you're looking for.
In the case of this car, there are a number of things, I hate to say, that would make me walk away. #1 is probably the fact that where the VIN plate is screwed in is the place where the car's data plate should be, the little plate with the color codes, several option codes, the body number, etc. My guess is that this car's body tag is long gone and I would NEVER buy a car without a body tag or one that has the VIN plate in the wrong place, it's not even close. This also tells me that whoever did the 'restoration' probably wasn't very versed in these cars. "Frame on Restoration"? A 'frame off' is impossible on a uni-body car,
Which brings me to the inspector... he certainly was thorough in his inspection, but the form used looks like it's the same form he'd use when inspecting a used Camry. I would trust someone who is versed in Pagoda SLs, just about anyone on this forum, for example, to inspect a potential W113 purchase rather than a generalist type inspector.
I would guess this blue color is not original to the car. The back of the hood and the interior of the engine bay are black... they should be the color of the body. Scrape some of the paint off and you might find the original color.
Lastly, the price. $69,000, for this car, is insane in my opinion.
For this kind of money, you can do much better. I wrote an article about this 250SL that was sold for $71,500 at one of the high end auctions in Scottsdale a couple weeks ago.While I'm not a huge fan of buying these cars at auction, because there are so many available on the private market where you can take your time, drive the car, visit the car in the garage where it's kept, get a feel for the owner and how they approached maintenance talk to them, etc. At least it's a similar car and a reference point of an actual, recent sale. One of the 280 SLs at that sale was far better than the car you're considering and it sold for $74,000 and change.
I sold this silver 1971 280 SL last Summer for a lady who had owned it since 1983 or so. It's a driver, not perfect. I put it on Hemmings.
This album of 200+ photos was viewed by 800+ people. Lots of people looked at it, I eventually sold the car for $45,000. This was about 7 months ago. Again, it wasn't perfect, it's front fenders had been replaced, common for a W113, but it was a solid, good driving car with known history that the new owner could enjoy while maintaining regularly over time. It needed a new soft top, sub frame mounts, regular things. I always say just about any Pagoda needs (or could use) $5,000 worth of work.
On the open market, you've got more choice and can find a better car. Hold out for your color if you want, but maybe some other colors will grow on you. There are plenty of silver cars out there and a decent number of light blue metallic examples. And when it comes time to have an inspection done... call the local Mercedes Club section wherever the car is, find out who in their section is 'the Pagoda Guy' (every section has a few) and have someone like that, a 'w113 geek' go look at the car for you. I think they will be able to give you more informative feedback that a 158 point inspection with 'satisfactory' 'needs repair' on it.