340 Engine

It's not "too much" until we know A) what he asked for .... did you walk in and say "I have to have 500hp?" See how many posts start with "How do I make *** horsepower?" and you'll seee what I mean. B) What is he giving you. If you handed him a block, crank, rods, heads, and intake, I can easilly see that getting to $8500 as the engine won't run without a LOT more. A good performance rebuild will cost at least $4KUS with parts. What about the carb, distributor, tin work, fuel pump, water pump, water outlet and thermostat, balancer, etc. Lots of guys ***** about prices but have no clue what other stuff needs to be attached to make it run. Total every nut and bolt and see what it costs to get it running.
I agree it sounds big on the surface... But I'd stick my head under the surface before I start yelling "yank it" and the guys a crook.