The engine was just rebuilt I was told!!!

I guess it is safe to say you learned a lesson. It is my motto that if you can't see with your own eyes what the seller claims, assume it is not what he says and buy accordingly. Then if you tear it down and it is what he claims it is, your a winner.
True. If an engine is not running, you must assume it needs a rebuild. If it was really 99% done and ready to go, any reasonable seller would get it running for the sale. If they do not take the time to get it running, there is a reason. OR they must be willing to sell it for less. Same with transmission. If car is not running and driving, you should assume there is tranny work to be done. The only way I would not make those assumptions is if the seller provided me with receipts.