That is a PSRU, a Propellor Speed Reduction Unit. They are necessary when fitting an automotive engine to an aircraft with the RPMs auto engines run. Props become inefficient after about 2500-2700 RPM (depending on the prop).
Did they say what type of aircraft? Looks like a Lancair.
I believe the main difference between the LS400 and SC400 engines is the location of the oil sump and pickup. I'm not sure how easy it is to change them, but $650 is a hell of a deal!