Good observations all. Well, just because you see a sheath with a knife does not mean it came from the factory with it. Particularly one this old. How old? Well, the youngest it could be is early to mid 1973, but I believe it is even older based on the tangstamp location and serializing (the low sounding number does not correspond necisarily to the standard production serial numbers). My guess is pre '70, but I cannot prove this. Late '65 / early '66 is as far back as I can pin a retail sale of a production 165OT
OK, the blade. It does have sharpening scratches, but no wear. Knowing the thickness of the blade, and the type of steel really pays off here. Almost all of the production knives had a crocus finish. It is still visible on this knife. The blade is still full, but more important, there is no edge wear, the reversed guard is not scratched, and the "sawcut" lines in the handles are still crisp and bold. I would grade the knife a bit higher than you. It is not what I call near mint, but a step down at excellent. The crocus finish could be restored with only a little work since there is no apparent pitting or even peppering of this carbon steel blade. I don't think it was used much if at all. I think that the P.O. went ballistic with that rock they gave him and scratched up the blade. To me, the CONDITION of the knife matches the condition of the sheath with drawer wear. I would have to see several more of these to be fully convinced that it is an original sheath, but it is possible. Some private edition sheaths found with 165's produced for Sears Craftsman, Ducks Unlimited and others bear little or no resemblence to regular 165OT sheaths.
Codger