The only thing related to .30-06 is likely the 1903 sight cover!  Auction houses (except for the big specialty places) often know very little about guns. The chance that it is anything other than .30-40 are VERY slim, but, given the fact that it has passed through Bubba's hands, a visit to a gunsmith would certainly be a good idea. As to hunting, out to 200 yards or so, a deer would never know the difference between a .30-40 and a .30-06.

I do not believe a 1903 barrel would fit under the Krag hand guard without extensive re-profiling of one or both. That appears to be at least the the base of a 1901 rear sight, but the leaf looks way too tall, and the slide looks a bit strange, unless it is just camera distortion.

Price was extremely reasonable - personally, arms like that have no appeal for me, but I know that many others like and use them, and you certainly didn't get ripped off. I've seen people pay a lot more for much worse!  :-)