Yup, erosion, debris or even dropping them can mess up the sound.
You can checkout LiveAuctioneers.com or eBay.com for completed auctions to see a range of values. Some amazingly detailed examples go for high hundreds of dollars while some more plain eroded pieces go for $20. Your friends example is on plain, eroded end of that range. On liveauctioneers search for Ocarina. On eBay search for Pre-Colombian Ocarina.
The other issue, and it’s one that many people ignore, is that Mexico doesn’t allow the export of relics. The US doesn’t allow the import of ancient Mexican pre-Columbian material without permits. It’s not likely to be a big issue if you sell it on eBay, but it’s not something most galleries or advanced collectors would touch with a 10 foot pole (even if the condition were much better.)