The finish defects are very difficult to hide but using diffused light instead of this kind of glaring light helps, as does removing fingerprints and carefully dusting lint and actual dust off the gun and photographing it on an absolutely spotless background. Unfortunately, a good camera tells the truth, the whole truth and nothing but the truth.

I agree with you as to the price. Back in the day everything you mentioned doing or having done to it made it a paragon of desirability and it probably would have commanded that kind of money. Today, if it isn't plastic and doesn't hold a box of shells in each magazine it is barely sellable. Here on the peninsula, I would price it at about $1200 and be prepared to come down to $1000 if it didn't sell within a couple of months. It may be different in Vegas. If I just wanted to sell it quick I think putting a price of $800 on it would sell it in 24 hours and be a step too far, but I could be wrong. 

I'm confused by the actions of the shop handling the sale - they don't seem very knowledgeable to me. If I'm considering buying a gun like this for a price like this, and the gun has obviously been worked on, I want to know that it was done by a reputable gunsmith back in the day who specialized in 1911 work. Mentioning that in the ad is really critical and these guys didn't even hint at it.

Anyway, that's my  worth...