Unless I'm not seeing some minute detail that you're seeing, wilberj, the engine looks correct, to me. I've got a 1253-01 (original owner) and a 1253-02. Perhaps if everything were correct and it was in mint condition, the price might be justifiable, but in its present state, I agree with your assessment.
Here are the differences that I see:
1. The color of the entire engine is wrong. It should be Bolens white.
2. Everything under the hood should be white.
3. The fuel tank doesn't look correct; too squarish, too short (?). The 1253-01 should have a metal tank, which has larger radii on the longer edges, than the one in the pic. The 1253-02 should have a black plastic tank which has all rounded edges.
4. The carb and fuel pump look correct, but the muffler and exhaust pipe are wrong.
5. The seat is wrong. It should be the type with the separate bottom cushion and separate adjustable back cushion.
6. The foot rests should be Bolens white.
7. The lift lever should be Bolens white.
8. Where's the air cleaner? Should be the round type.
9. The fuel line is obviously routed wrong; should go through the holes near the front of the flywheel shroud and be regular black rubber fuel line.
10. Part of the shroud over the back of the engine is missing. There should be a vertical piece (heat deflector) that attaches to the two holes in the top shroud. It creates a partition behind the carb area.
11. The lift handle on the hood is not original.
12. The tail light might be wrong. Both of mine have the rectangular tail lights with the chrome bezel, although Bolens used the oval-shaped tail lights on many tractors, as well.
13. The dash panel/shroud should be white.
14. I'm not sure what's going on with the hitch area, but it doesn't look like the original hitch.
Here's a pic of my 1253-01 (from a few years ago. The engine currently out and disassembled, awaiting rebuild) and a couple of assembly diagrams showing the missing or incorrect parts.