$12k is still a little high, around $7k would be more in line, but in the end it's true value is what one is willing to pay for it.
I believe in pricing the truck your friend has let the fact that he completed a frame off restoration on the truck influence his pricing, and on some vehicles this could be a price factor, but these trucks arent as rare as you might think and they havent hit the collectors market yet which keeps the price down.
Yes the 22R is undoubtedly one of the best engines ever manufactured, a 22RTE engine would be a much better find.
Is this truck fuel injected, Extra cab, 4x4, Automatic? Those particular items could influence the price slightly.