I'd say you need to find a new machine shop.
Wow that's a lot of money, for what you know is reasonably simple!
Even to carefully set up the axle in the mill and accurately bore the hole larger taking the kingpin inclination angle into account shouldn't take that much time/money.
Must have been a job they didn't want to do, and instead of telling you as much they give an exaggerated price, possibly now keeping you from coming back later...?
Grigg
