W8KT, It looks like a lot of blue smoke in the exhaust, I would be concerned about it being an oil burner. Burning a little oil isn't too bad, an older engine could be getting just good lubrication, however, I would be concerned about compression and cold starting. The blue smoke could be oil seeping past weak piston rings, so they might not hold the compression either. If it needs either to cold start then it could be a problem for you, if it always needs either to start then there is an overhaul in the future. Did he have it running or warmed up when you got there? Try to do a cold start and see how it starts for you.
The 4 in 1 clam bucket is very useful but they will exert more stress on the loader frame, and front axle pins and bushings. Watch for weld repairs or cracks especially around the cross bar in front of the front grill. Also look for repairs or cracks around the loader tower where the arms mount to the loader tower. The front axle spindles can also have a lot of play and may need re-pinned to keep the steering tight.
I have finished 1/2 of my article on my website about what I look for when I am inspecting loader backhoes you might find it helpful.
http://accuratemachinery.com/stories/Story.2006-06-11.3145
You will also find an article that I wrote about diesel engines that might help as well.
One more thing, values are way down, I don't know what you are paying for this backhoe but you might want to check the auction results of late, the later model machines values are way down from just 6 months ago. Accumac.