Can this be saved ?

Pretty sure that your car would end up sold to a wrecking yard, where the ins. co. would get about $200 for it. Everything is negotiable, especially with insurance companies. I think that they're starting way high to try and save the most money on the payout. You could buy another 71 that runs and drives for $4000.

Don't forget also that the car will have a salvage or reconstructed title if you try to put it back on the road. That will lower its resale value dramatically. $4000 seems like way too much to me, I'd offer $500. The insurance company will do the math and if they come out ahead they'll take the money, and move on to the next claim. No way they're going to get $4000 from any salvage yard, they're trying to bleed you.

That's just my opinion though, the last car I bought back from the insurance company was a 1967 Chevy pickup, in 1984, for $300, after I got the payout from the ins. co. of the guy that hit me. But it was a work truck and ran fine after I put a new radiator in it, so it was a no-brainer.