What a dilemma!
ask yourself,
"Why is this guy willing to trade a nice clean straight car for one needing paint"?
The Demon even as a 6 is worth more than a Dart Sport. More desirable Demon and you have installed the V8, the 340 Dart does not have the number matching engine either, who cares if it was a 340 car, it is no different than your Demon with a transplant engine. Now things being equal, the Demon is worth more.
Paint it and then enjoy it
If cash were included then it might be a good trade, any offers to you should be in your favor not theirs.