I was there at French Creek when Katherine and her son were raising the sails on the boat. The dacron sails, made by Lee Sails in Hong Kong, were quite sun worn in some (upper) panels and you could see through them in some places. They should have had sail covers for them as they hadn't been raised in a few years.
Despite the weathering, you would probably be fine for coastal cruising around the Gulf Islands for a year or more. If you were strapped then you could patch a few areas or just replace the top panel. They remind me of a photo of Arne's Malena with a 10-year-old worn-n-torn sail, sailing along happily.
Long term I'd replace the sail with a cambered panels using top gun (or other UV stable fabric). What I concerned me more was the fibreglass (?) plastic battens that seemed way too thin for the rig. There was no wind, and I didn't see it under sail, but they couldn't have been stiff enough for a rig that size. You'd want some nice stiff aluminum battens in there. I don't think the boat had ever been sailed much at all. The sails are textbook Hasler/MacLeod planform, actually looks just like the schooner rig on Ron Glas. Euphroes on the sheetlets, yard hauling parrel, but no visible running parrels on the luffs.
I got a tour of the interior as well. I took a bunch of photos if anyone is interested.