Your uncle didn't do too badly. It looks original to me and is only worth about 40 to 50 times what he paid for it (maybe more). It is a 1914 Variation Navy and, according to Jan Still's "Imperial Lugers", is one of only about an estimated 7900 pieces produced in 1916. The only reservation that I have is that although the markings show appropriate age the font of the "3"s on the barrel does not match those of the frame. Perhaps this is correct, but I will have to let the Navy Luger experts weigh in on this.
From the photos, it does not appear that the gun is properly assembled. The front of the receiver does not line up with the front of the frame. I suspect that the "T" hook on the rear toggle link is not engaged with the mainspring transfer lever.
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If it's made after 1918...it's a reproduction
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