It really of depends on how badly a person wants it… and how knowledgeable the seller is.
If you really like it, I don't think that $500 is out of line- especially if it's a local/private sale and you can (potentially, depending upon local laws) avoid shipping/background/tax costs.
If you could get it for $400, that'd be a sweet deal- but probably unlikely.
The MK II series values really went up after they were discontinued, and the MK III was foisted upon us. When the MK IV series came out, the MK II prices began to fall, somewhat.
A KMK 512 (same basic pistol, but w/5.5" barrel instead of 4") is one of the more popular configurations in the MK II series. You can usually find a bargain on one of them on GunBroker, etc., if you keep your eyes peeled.
***How much of a premium are you willing to pay, for that "shorty" barrel?
I'm an accumulator/shooter, not a collector. For me, the true value is how much fun I'll have shooting some pop cans… To a picky collector, the non-original grip panel might be a good bargaining chip- or even a potential deal-breaker. It wouldn't give me pause, for more than about ten seconds.
RF member "onegunsnotenough" has done a lot of wheeling/dealing in the MK II series, over the years. Hopefully he'll chime in with a possible value estimate.