Interesting you would post this, as I have a splitter someone dropped off to get fixed in the same situation - it was sitting outside, motor is seized, hydraulic lines are questionable, tires are junk, but otherwise the cylinder/valve body/pump/frame all look good. Here is how I have things figured:
Used Honda GX240 off of a pressure washer - $200
New motor & pump mounts, home made - $25
New Hydraulic Lines - $50
Sandblasting, Primer, Paint - $75
Two used tires I had laying behind the shop - Free
So yeah, he's putting $350 in it, but he only paid $100 for it. $450 for a working splitter that shouldn't give him issues for years isn't bad. When I scratch build a splitter I usually have around $1000 in parts alone, plus 20 hours of labor, so if you're looking for a splitter on a budget I think that is the way to go.