Not to get away from Scotter's questions, but here on my thoughts.
First it was a bad mistake taking the engine without being dynoed. I've had it takes 6 months to build a motor that was suppose to be 10-12 weeks tops. Yea, it's crappy, but it happens all the time buy builders.
The minute you take it away it's yours "as is". It's a racing motor no way would I warranty it either. IF it had been started at builders shop I'm sure he would have fixed it and or any other issues.
As for the dyno results. I've seen first pulls 150+hp less than final tune. I've seen different hp results with same motor on different dynos on the same day so I don't put much into the dyno results in this case.
I would have made it clear up front that my motor be run on the dyno!! A new build should always be run if for nothing else to get a base tune and make sure there are no problems. I'v seen all kinds of stuff go wrong on the dyno including burnt pushrods, broken lifters, etc.
By looking at parts used ( heads, wet sump, etc) I seriously doubt that combination could make 1,100hp. If so It would be a MAX effort build, This was not. I would have questioned that in the beginning.
If I were the builder I seriously doubt I would pay for repairs that another shop did such as the intake gasket. IF I HAD NO DOUBT THERE COULD HAVE BEEN A PROBLEM is the only way I would consider it. Again dyno at his shop would have found this.
It's my personal experience that you get more out of people by being patient with them. Even when I get pissed I wait until I have my motor before I vent on them. Nothing wrong with pushing a little, but to much and this is what you end up with.
Here we sit with a customer that feels he got shorted and mislead on a motor and the builder already feels that he has gone above and beyond what customer paid for and agreed too.
I really can't say unless I was there and heard the conversation or was able to sit with both and discuss it with them.
I would have NEVER taken it before it was dynoed!!
That's my personal feelings and doesn't mean a hill of beans so don't take it personal.
** I don't dyno my current motor every time we freshen it, but I have been with my builder for a long time. He travels with me and is one of my sponsors. He has a lot of interest and involvement in my truck***