That thing looks clean, which isn't usually a bad sign. I wouldn't think the spindle thread damage is a deal breaker.
The biggest make or break is going to be the same as any aging CNC, control support. That baby could run sweet as candy for 2 months or 20 years, then decide to toast a board one morning, and you're suddenly sitting with a blob of scrap holding the floor down.
I'd call a couple service techs and/or the factory and price a couple of the main boards. See if you can stomach the number they throw out. It's probably more then the machine is listed for.
A Centroid retrofit is $8-15K installed. A homebrew Mach or Linux control is ~$2k in parts, but 50-100 man hours to install. And then you have no support to call on. I have a Mach3 BP V2XT and I about scrapped it several times during the retrofit process. It still has major quirks, and I wouldn't want it between me and a paycheck on a job.
I've heard lots and lots of great things about Mazak lathes. I think if I were headed that direction, I'd definitely give them a look. You're in CA, so you have reasonably close access to more machine sales than I could ever dream of in Oregon. When I get serious about a VMC, I think I will look at used machines in CA. They are still cheaper after paying freight, than buying around here.
Greyson