Jesus, what are they charging you in labor? If a person doing a rebuild knew what they were doing and they devoted their whole attention to it, it should only take between 15 - 20 hours to remove the old motor, assemble the new one and reinstall assuming every single part was available. Hell, if there were more than one person it would take less time. At $75/hr for labor @ 20 hrs only comes to $1500 + tax and disposal fees.

Are you having anything ordered? Do you have EVERYTHING to rebuild the kit such as a full rebuild gasket set? I have found that if the shops have to use "their money" to order your parts, they tack on a little extra to make money on that end as well.