What to do when you catch a car salesman in a lie (and confront him about it)?

I was shopping with my girlfriend for a car recently and found a 2003 honda civic for sale at a local dealership. The car had 136,000 miles on it and had practically bald front tires, however the dealer had the car listed at $9,000. I low balled the dealer and threw out 6500 after tax tag and title. After "sending it in", the salesman came back with some paperwork saying 7400 BEFORE tax tag and title. The dealer also had a suggested retail value written down of 9,000. Little did he know i had researched kelly blue book value on my smart phone while he was away for the value of the car. KBB said 8,000 so i asked the salesman where he got his figures and he said "Oh, we use Kelly Blue Book" to which i replied by showing him my phone. The dealer got an "oh ****" face and started stuttering about how he was just "given the numbers" and it sounded right. I got a "bullshit face" and said we weren't paying a dime over 7000 because the bank wouldnt loan more money than that for the car. The salesman wouldnt go below 7400 after tax tag and title. I'm wondering if I hurt my chances of getting my price by confronting the dealer and what I can do to get him to drop his price. The trade in value of the car is 4500 so i know he is making a profit no matter what, even if he had to drop 1000 in maintenance to get the car ready for sale.