Sounds plenty high to me, but then again I do most of my own mechanic work.
I was in a dealer last night and noticed that their shop rate was $72 an
hour. I guess that is not too bad if they are paying the mechanic $25 an
hour. I would say they are probably really paying $15-16 and the rest is
"overhead".

I would think some independant shop would do that for $500-$600, assuming
the parts are not more than $150-$175.

That would likely be : timing belt, belt tensioner, crank seal, cam
seal(s), water pump.  If you are doing the belt - do the seals as you
are right there and they get hard and only take 15 min or less to
replace.  The water pump is also exposed and is a good time to do - it
costs labor to re-expose it again.

Timing belt kit (tensioner and belt) about 150$
Water pump about 140$
Seals   about 40$  (my parts pricing is ballpark)
The rest is labor.  Job takes about 3-4 hrs.

Doing the water pump with the belt at the same time should save labor
costs.  You take the same things apart to get at the parts.  Sounds
like they are quoting for two labour operations for one job.

Pete
licenced automotive mechanic
licenced heavy equipment mechanic