[QUOTE=megansmomma;4492784]But I think the issue here is more that this is a puppy with a Grade 2 LP and a vet that will do surgery on a 16 week old puppy for $350. I've never ever heard of such a young puppy with a Grade 2 LP needing surgery let alone that surgery costing $350. This is not adding up to me and I am now questioning why the puppy would have been DXed at such a young age is LP requiring surgical repair.
Additionally, the grading of LP is subjective to the vet upon examiniation is it not 
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Not only subjective but based upon the skill and expertise of the general vet.
I think that we don't know if he was recommending surgery on a 16wk old pup, but that he could do surgery for an LP repair (presumably if necessary) and the cost was $350. At least that is what I remember from the OP post she said the "vet she recommends for the surgery charges $350" This statement appears to be tied into that the breeder would only discount the dog for an amount less than $350 maybe it was $200.
I take from the OP's post that the breeder would advise the buyer if symptoms warrant down the road, using her general vet for LP repair and that is what he charges.