And a reply from the ebay seller when I inquired about a (partial) refund after he described it as working perfectly:

Hi. I'm very sorry I got camera from estate sale in chicago and the saler tell me the camera working I paid for this camera for $110.00.
Awesomeness. More positive karma for me and negative for him.

I held the mirror up while releasing the shutter at 1/500th and 1/1000th. Same effect. It's definitely the rear shutter curtain which seems to not even open up all the way. So it'll probably end up at KEH.

For everyone that thinks the shadow would be sharp at the edge of the shutter, here is a photo from my Spotmatic shot at 1/1000th which has the same problem (which goes away after you fire the shutter about 5 times.) The Pentax has a horizontal shutter travel.