I should have learned the lesson the first time,If you don't know dealer ask to remove the coin from the 2x2 even if it is stapled! This example wasn't as pricey as the bent 1858 Canadian Large Cent but it still raised the hackles on my neck. This 1897 IHC was hard to pass up at $14, now I know why it was priced that way.
Ugh. Yes, those 2 X 2s can hide really miserable surprises. I sadly had a similar experience when I overpaid for a 1944 Walker 50c that looked FANTASTIC in the flip and when I got home and opened it up the rim was covered with dings. I didn't pay too much for it otherwise I would have confronted him, because he had to know that it was overpriced. I have since avoided him when I see his face at coin shows. This hobby does unfortunately have a slimy side. It would have been nice if the dealer had written "damaged rim" or something on the flip for the IHC. Of course he probably would never sell it with that addition. Ugh.
You could mill the edge and make it proof-like.......Nah, that's wrong, but I saw one in a show. Dealer called it an "impaired proof".
I bought this to flip and of course I will divulge all the information when I sell it. I got it last summer at the PAN (3 hrs. from where I live) and for some reason it got set aside,it was to far to take back anyway. I was burned here for one reason, I trusted the dealer. Simply put, my fault. This is what I like about eBay, they make their sellers tow the line. If a product is misrepresented you get your money back and the seller is punished by having to pay the return shipping.