What he is saying is that you have to subtract the cost of carb, distributor & headers from your $8,500 budget if you are price shopping a rebuilt long block.
No, budget defines as the motor comes off the dyno, excluding headers. To be very clear this would include carb, distributor, fuel and water pumps.
As the bids continue to come in it appears the $8500 +/- $250 is a reasonable number.