As long as it doesn't have a burnt out barrel, I'd buy it.
1. How much does the scope being drilled into the action hurt it?
Maybe that's why it's priced at $2000. Yes, it hurts it from a collectors point of view but as an owner / shooter, no. Also means you can scope it with a scope you like without going through any pain of butchering an original rifle !!! LOL
2. Does being a sporterized service rifle make it that much less valuable than a commercial rifle?
Not sure.
3. Does the Nazi proofmark along with the Westley marks make a difference?
Not sure but sure makes the rifle interesting IMHO.
4. Are those the original service sights?
I don't think so BUT I can't see them that well and as with any rifle, they made what the customer asked for.