am i paying to much for race short block?

It sounds good from here, though alot depends on the rest of the parts, there current state of wellness of the new parts as well as the old parts and total work performed on the shortblock.
They can cost more than that, equipment and intended purpose can raise the cost easy.
If I knew the builder by rep or personnaly, and I was in your shoes, I would ask some questions on it and ask for a possible guarrentee on the work performed. He may not give it if the shortblock sits around for awhile while you collect parts for it.

Also, @ 500 cubes, I really would not just top it with Edelbrock heads. Otherwise, it would perform like a 440. Something like preped Indy heads that can help 500 cubes really shine.