Sounds like your in the business Intense.
I was too and I faced many customers with some pretty "interesting" ideas. I would listen then put forward my more rational recommendations. Most times the client would listen but, now and then one would come along that just wants to try it his way.
If the guy had the funds and realized the risks, I'd give it a shot. I'd often learn something along the way too. The shop owner as you described doesn't sound like you or any other reasonable builder out there. Sounds more like a liar and a thief.
Haven't you ever swam against the current and had a success? I sure have.
A combination of that and other business ventures I've taken. I gave up on the machining after two years...no money in it unless you find a job with a NASCAR team and even then, you're at the mercy of losing the contract and left hanging in the wind looking for another team to work for. No stability. Pay is much better though! It's something a younger guy with no family should get into.