Sounds like you local machine shop is taking the p*ss, there is no way it should cost that much, shop around for some better deals.

The process of installing new guides goes something like this:-
- old guides are punched out of the head
- guide bore in the head is checked for size in-case oversize guides are needed
- head is heated in an oven, new guides are cooled in the freezer and the guides are then installed, hopefully using a guide tool to align them with the valve seat
- valve guides are then honed to match the valve stem diameter
- the valve seats are then cut ideally using 3 angle cut
- some modern machine shops using Serdi and other valve guide honing and seat cutting tooling claim that their accuracy is so good that no lapping is necessary, assuming the valves are in good condition

This type of renovation is standard business for many car engine re-conditioners so with only 2 valves instead of 16 or 32 I don't see how they can charge that much. Maybe you could try a motorcycle specialist such as E&V engineering who have huge experience with BSA's etc. see