Do you know if the parents or grandparents of the puppy have been health tested? If any of them have been DNA tested for either PRA or FN the results should be on the KC website. There are other tests that should be done too, such as a one off eye test for glaucoma and hip scoring.
Even if all those tests have been done and the parents are clear, I would imagine there may be other risks of such close breeding that don't relate to inheritable conditions. But I don't know what they might be. One thing I know for sure, I wouldn't buy a puppy from the litter, or indeed from the breeder.
It also makes me wonder about how closely related some pedigree dogs that aren't KC registered might be. If someone decides to mate their unregistered bitch with the unregistered dog from down the road, for instance, they're unlikely to know if the dogs are closely related.