rebuild it
That price doesn't mean much unless you get a complete list of what will be done (as opposed to "checked").
Very common for one of these two things to happen:
1. the price was kept, he just shortens the list of work and parts to make whatever profit he decided on (frequently used when a problem comes up, like he breaks or loses something that he has to replace out-of-pocket)
2. he discovers the motor is in worse shape than he thought, and does more work - but adds $1,000 to the price without getting authorization
For a complete rebuild in the truck that's a pretty good price, but does it include cam bearings? Surface both the head and block? Grinding both mains and rods? Re-aligning the dipper system? Rebuilding the rockers? New valves, or just re-faced? You get the idea.