What you have in your favor:
1. You SOUND like you're on the up and up - meaning we have been approached by some fakes lately.
2. You sound like you could hold your own in a bar fight, even if you're Five Foot Nuthin' and Aged.
That means somewhere in there is the courage to conquer. However this is no doubt a "used and abused" buggy horse we're talking about.
The Amish are notorious for abusing their buggy horses but treat the plow horses like half the gold at Fort Knox.
Normally I would tell someone that can only spell the word "horse" to run as fast as they can away from a horse such as you describe.
I'm still not sure that I shouldn't be saying that but:
1. First and most important: What gender is this horse? You refer to it as a "he" but is it really? If it's a stallion, meaning it still has BOTH testicles, sorry but run don't walk away from this horse. You also say the horse blows at you which might be another indicator it's a stallion or a proud cut horse - either way not good, not good:(
2. If it's a gelding, a stallion that has had its testicles removed, given the Amish are notorious for doing their own version of gelding which is a/k/a "proud cut" and they didn't get everything, run and don't walk away from this horse is still the better part of valor.
3. If it's a cranky mare (it has a pair of boobs instead of testicles), you stand a chance but she's a dominant mare and you would have to quickly establish the alpha dominance over her, when you are in her presence.
Honestly things aren't looking too good to keep the horse and even more honestly but the sad truth is the horse may very well be destined for the auction unless your friend can find someone that is excellent at rehabbing a horse such as this.
Were it not an ex Amish buggy horse and it's a mare or gelding, I'd say with your grit, hang in there. BUT, I started breaking/training horses when I was 12 and I had a real penchant for re-schooling widowmakers and finding them good homes.
I wouldn't have thought twice about this horse when I was in my 20's but even when I was in my 40's with all that experience, I probably would have passed unless I knew it had some exceptional ability to become either a great trail horse or do something noteworthy in the show ring.
That was pretty much a "yes I guess not" answer that leans toward "find the horse another home".
That being said, if you just can't walk away, you have to tell us the gender, and whatever history you can find out about the horse and we will try to help