I've got two 036. My favorite firewood saws.
First one I bought used >20 years ago paid $150. I have put in: clutch upgrade kit, new 20" ES bar, chains, chain tensioner, clutch rims. That's it. P/C still looks great through exhaust.
The second one I got free, owner had seized it. I salvaged the cylinder, put in OEM piston/rings, seals, clutch upgrade, impulse/fuel/oil lines, carb kit, upper rod bearing, spark plug, new ES bar/RS chain. Have about $230 into in in parts, but it's real nice. For some reason the original owner had a 28" ES bar on it. I redid the rails and that is for my 056/064/066 saws.
I'd have wanted $400 for that one after the rebuild. It's sort of my backup for my first/other 036. I have a spare NOS OEM piston and a good used OEM cylinder as parts backups for either.
So $400 is not out of line for used 036 if it's nice and all OEM parts