Is this frame damaged?

Looks worse than fucked as that indicates a major frontal impact. Here is some advice which you might take or not.

1. Get money back from seller without screaming at him/her and telling them they are a complete shyster for selling a bike they should know is toast!!
   
2. Ask them if they want to have bike/frame returned?
   
3. If they do not want the frame returned consider taking it to a reliable frame builder and getting a replacement tube (one of the benefits of steel). It will not be cheap and you will also have to get frame resprayed/powdercoated.
   
4. Advertise your free frame here and when you sell it make a donation to forum. This might be the most important part!!
   
   

3 and 4 are OK if the cost of repair and painting will generate a surplus. If not, crush the frame and bin it or put it in a skip with a note describing why it is there.

Good luck. Do not sue me as I am not giving you this advice in any professional capacity!!!!!!