What is the relationship between block, gear speed and derailleur? With Pictures
Sheldon Brown to the rescue: http://sheldonbrown.com/gloss_ba-n.html#block


Short for freewheel block; cluster.


My understanding is that the bike has 7 speed shifters and for some reason 8 speed freewheel. Only 7 cogs work, so the seller is planning to switch to 7 speed freewheel. 7 and 8 speed freewheels nearly same distance between cogs, so wrong freewheel can actually work the way described. 

One possible problem is that 8 speed is wider than 7, so the frame may have been bent to make room for the wider freewheel and may be bent at the process.