It sounds like that rough estimate they gave you is a basic rebuild. I'm getting ready to drop off my block and these were the prices they shot me for basic work. Since they haven't seen it yet, an accurate estimate can't be given.
$135 Clean, mag check, remove cam bearings
$180 to line hone if need be
$200 to turn crank if needed, chamfer oil holes & polish, check for straightness
$175-$225 to balance rotating assembly (price depending on weight matching of rods & pistons)
$280 to bore, hone w/torque plate and deck the block
I've already completely disassembled the block and removed the oil galley plugs and freeze plugs too.
Keep in mind this doesn't even include parts either. My heads are already done and I have about $1100 alone in them. They aren't exactly stock either.
Cam will be $140
Rods will be $386
Pistons will be $445
Still need new balancer, flexplate, bearings, lifters, push rods, rockers, gaskets, oil pump, fuel pump, water pump, etc.
Once you get away from sbc's, you gotta pay to play. On the upside, Olds engines have a good design and great metallurgy. Pontiac & Buick next, and then Chevy having the weaker castings and most low tech design. No offense Chevy guys, that came straight from a machinist with over 20 years or experience. He's a Packard guy too.