I have sailed my 1985 O'Day 222 for ten years, and it has been a great boat. I've sailed on small inland lakes, and on Lake Michigan, and it is a stable and forgiving boat even in strong winds (i.e., up to 20 knots with a double-reef in the main, and the jib furled). I typically have spent a week or so cruising on the boat with a good friend, and while it's a little tight, it is doable. I also had some minor cracks under the mast-step, and I determined that the metal tension bar that Joe is referring to was not installed on my boat (it was added either late in 1985 or 1986). I added the support and it stiffened up the hull under the mast such that my stays had to loosened about 1/4 inch each as a result. I have no problem single-handing the boat. When you replace the mast-step, get an organizing plate from DR Marine. It will fit the holes perfectly, and you can easily add a block to lead the main halyard back to the cockpit.
I've made a lot of upgrades over the years (new motor bracket, new motor, new main which made a huge difference in sailing performance, new CDI roller furling jib, electronics, new rigging, resealing under rub rail, brakes on trailer, autopilot, etc.). I always try to do a small improvement each year and the boat is just about done as far as I'm concerned.
Of course, I did finally give in to 2-foot-itus (actually 3-foot-itus), and bought a 1983 O'Day 25 last fall so I'll be turning my attention to the new older boat. But I have gotten a great deal of enjoyment out of the 222.
I'm a little confused about the statement that you made about the cable at the top of the mast (backstay presumably since the forestay attaches to a tang part way down the mast) that came loose and needs to be welded. If the cable separated from the swage attachment, the forestay will need to be replaced. If the aluminum masthead is damaged, it would need replacement. Not a big deal, or big expense either way. I would suggest that you check the bulkheads for signs of water intrusion. Also, check the carpet-liner for watermarks, since these are also indications of water intrusion. All of this can be fixed, but if your bulkheads are rotted, then it is a bigger job. Joe's comments about some of the other issues are as usual, right on target.
All in all, $900 for a 222 (or last year of the 22) seems like a pretty decent price if the boat is in good shape. You didn't indicate whether it had a trailer, but if it does, that's a very good price. The trailer alone is worth that.
O'Day's are well-made boats, and you won't regret the purchase. And this site is an excellent community to get ideas about how to improve the boat, and improve your sailing skills. There is also an annual get-together on the east coast known as rOnDAYvous of O'Day sailors. As a relocated east-coaster (I grew up in upstate NY), I haven't had the chance to participate, but it does look like they have a lot of fun. Perhaps someday.
Anyhow, I hope this helps, and good luck with the purchase if you go forward with it.
Dave
O'Days 222 and 25