If your symptom is that you turn the crown and it never reaches a point of being fully wound ("it kept winding without stopping") then your mainspring broke and needs replacing. You might be able to store a little energy in the broken spring to power the watch for 10 seconds.
I view the buyer's question from a different light. He may/may not care whether or not the case is engraved. What he is doing is negotiating. A valid answer to his question is: "No."
Also, as you will witness above, there are buyers who have other feelings about engraved cases. If you are...
To answer your earlier question, they are pretty common. Below is one with nearly double the serial number. I think it only needs a new mainspring. I was going to use it for my first attempt to clean and repair an American 18s pocket watch - when I get the time.
Are we convinced the movement is German? I note the A/R (Avance/Retard) on the regulator. Could it be a Swiss movement housed in a German made case?
I didn't find the anchor trademark on http://www.antique-horology.org/
There was another source for German makers listed there but I speak no...
If you place it dial up on a table to check timing, put a rubber mat under the watch. The rotation of the balance wheel will cause the watch to move a little on a smooth surface and throw the timing off.
Here is the dial. I thought the style of the dial would be from 19-teens but the Elgin database says that it is circa 1902.
Aside: Bob, I would consider selling or trading (what have you got?). I'll send high res pictures and a list of condition problems when I get a chance (to...
I think these are client decisions. I'd present it as:
I can make it run and keep time for $X
but it really needs such and such to be done soon and that'll cost $2X
or I can restore it which will take such and such and so and so and that'll cost $10X
Pretty much like...