TBH, if they had arranged for a full inspection to be carried out this probably would have been discovered.... They didnt ... their loss.... Buyer beware IMO... you could take it back (providing it wont have an extra owner on the book) then simply advertise it elsewhere let someone else take it away sold as seen,....
TBH where you have scuppered yourself IMO was by stating in your ad you knew it had been down but not mentioning frame issues.... not your fault I know, on the other hand, if they knew it had been put on the deck, they should have stripped to inspect before handing over cash IMO....
Tough one, I would be tempted to tell him to burn it and claim on his insurance

I guess the bike isnt on the hit list then??