No - I don't think $500 is unreasonable.
Bearman said in earlier post that he paid $200+ just for the one piece cross pin, so with a bit of machining, washers and assembly time I'd expect about that.
Added that if you got decent service and quick turn around I'd be OK with the cost.
IIRC part of the machining he does is to provide full contact on the side gear thrust washers which was a bit hit and miss from the factory. I'd expect you'll never have to touch that center diff again and it will have a stack less backlash.
Steve

