Good question, and hard to answer without writing 5000 words. Off the top of my head...
Mechanically, look for these things:
You should not see any welds, or cracks on any parts. Some Garands were cut and half, and then welded back together by importers. Some were done well, but if you see that, run away and go get a rifle from the CMP for cheaper.
The bore should be in good shape, including the muzzle and the throat. There are gauges that measure the wear. I wouldn't buy them, but there is a chance the shop may have them. Failing that, you can also use an M2 bullet to check the wear of the muzzle. You don't want it swallowing the whole bullet.
The oprod should have a very slight curve to it. Not straight, and not a drastic bend. It should pass the tilt test. Google it.
No springs should be broken.
No crack in the stock. The stock should be a good tight fit. (The trigger guard I mean.)
No pitting of the metal.
The sights adjust ok.
I'm sure I'm forgetting a few things. Search Jouster, the CMP forums, or here for other stuff.
For collectability:
Remember that "matching numbers" doesn't mean anything for a shooter gun. (But I'll not do any business with a gun store that tries to mislead people by saying things like an M1 has "matching numbers" unless every damn thing on that rifle is how it came from the manufacturer.)
Completely disregard the story he told you, unless he has paperwork to back it up. If he does, eye the paperwork with suspicion. What SN is the rifle anyway? If you tell us that, we can tell if there even was a chance he is telling the truth.
Look at all the numbers you see everywhere. Write them down. Then take those numbers and see if they are what should be on your rifle. Order "The M1 Garand, Serial Numbers and Data Sheets". Alternately, verify them here. Someone will likely tell you if the parts should be original to the gun.
If you don't want to do all that, use the SN to look up the date the gun was made. Then look at the barrel and see if they match. (Even if they don't match, it could still have been rebarreled by armorers.) Look at the bolt. Does it say SA on it? Other parts you can easily see?
I could care less about the "widows" story
Glad to see you changed your mind after writing:
but just the history of this one had me sold
Buy the gun, not the story. A beat up gun doesn't mean it ever saw combat. It just means that it got beat up somehow.