So my first question is how handy are you with engine, interior, electrical, body and paint work. On the good side the guy is certainly not hiding anything from you but he is also not completely telling you the whole truth either. That popping with that loud lifter could certainly be caused by losing a cam lobe but don't panic quite yet. Torque is not an issue but its certainly misfiring and air is getting into the exhaust aso gaskets are leaking at a minimum causing that popping. Don't by the ethanol story either. I think maybe at some time in its life it was a AC car with the side interior dash vents but the center is blocked off which confuses me. The firewall has been modified somehow where the AC firewall evaporator housing would be located and the heater core is just an in and out with a hose in between. Most things don't work on the car correctly. Although it has some rust overall really not that bad considering the car is 52 years old. A full strip with steel works is required at a minimal but this is what is on the street at this time for under 25k. The back rear panel says its a Malibu with the Chevelle emblem however I do not think anyone is telling you its a SS. If they do, 68 has a 138 on the VIN and there is no discussion there. This is the hard part which is how do we advise you without insulting a car that you like which BTW no one here wants to do. If you will need to hire someone to do a decent job on the body and paint you are looking at 20k at the cheapest areas in the county, up north I wouldn't even guess but surely north of 50k. Now I said decent and not show. So now you have to decide if you are willing to work hard, get really dirty and learn a lot about making her yours or if just buying a car in better shape so you can jump in a drive it is more what you want. Think hard before you jump into a car needing a lot of work these days. Parts and labor are very expensive now so final value versus cost to finish is also an important factor to consider. Best of luck with your decisions. Feel free to ask away with questions, that's what we do best here, we answer them.
Edit: the center AC vent is there so it was a factory AC car and the AC controls are also present so you can make it factory again, a very desirable option these days. That explains the firewall work that I mentioned
Bill