Which cylinder heads do you recommend?

Depending on the labor rate, that's about right. That's not even 8hrs worth of time at my old shop's rate. It's robbery on the gaskets if that was just for the gaskets. But if he meant all the materials, that's close to right for retail too. You have oil, filter, antifreeze, misc clamps, shop supplies, and fresh plugs in addition to the head set (all the gaskets for the work) too.
BTW, you were careful to not let ANY of the debris from drilling/tapping get into the engine... Right?