Shame on him for calling you retired - since you still have 1 of the 2 bikes I would think you are just "Semi-retired".

I know nothing about the market where you live, or how easy/expensive a used S40 is in BC.

The asking price is not always the selling price - and it doesn't sound like he did $900 worth of improvements.

You could hit him up with an offer after a few weeks - he obviously will understand that you are aware what he paid for the bike.  His asking price likely has some intentional wiggle room so that he can accept a lower offer......you never list a bike at your rock bottom price.

Are you sure you need 2 of the same bike?  Wouldn't you be better off with a bike that is a bit different and provides something the Savage doesn't - like good highway speed or off road ability?

The reason I sold the bike was to fund buying a 2-cyl bike. That's still true.
The reason I jumped at the ad was because of the gorgeous deep red colour, and I let my ego demand I buy it back.
Overnight, logic kicked in. I sent the seller a note saying to pass it on to someone else, and to enjoy his good fortune. He apologised for the exhaust wrap (a'dude' thing) and said he's looking at a CB500X
All's well, logic prevails!
Cheers!  
ps: every year at least 7 or 8 S40s go on the market here. Prices range from $2500-4500 depending on year etc.
Someone's selling a RYCA asking $9000 !!??

Hay !  

I remember that water crossing !!  

I believe I was last one across it ?    Nobody was finding "SLIME" so I did it too !  

The first or second year I think .
..........................

I've thought of getting a  Himalayan  for such adventures ?