I agree. Time would be the true test. See if he straightens out, then either resurrect the project, or sell it. Maybe even have a "mock" buyer comer up to the door now and then to see if it is up for sale.
That's a heckuva deal. Sorry you have to let 'er go. I also remember when you got the car, you sounded pumped up. Good luck on finding her a home and good luck to you.