I can relate to that $40 a hole deal.I have 3 different machine shops I use,and one of them just closed up because the owner was ready to retire and the property the shop was on was worth 7 figures{you gotta love urban redevelopment} so he sold off all his machines and cores and moved on.I made out like a bandit when I went there with a few hundred bucks and cleaned out all his good bigblock chevy stuff and got a fully machined 400 block too.
Now back to the question.I use a "race only" machine shop to do any engine that I am building wher the long block will be costing me or the customer more then about 5 grand.I also have a corner parts store that does cylinder heads.
The old timer used cutting bits to machine the heads one angle at a time which was petty labor intensive,and he wasnt really interested in upsizing valves AND doing the job right,so when I made him do it,I payed the price.My race engine shop used the same quipment up until recently,and they charged less since they knew the tricks of the trade a little better,but they are 40 miles from my house,so I dont like to run to them all the time.The parts store is now my go to head shop.Years ago they had a good race engine machinist there,and he got them to buy a ton of equipment including short block stuff.After he left,they sold off the boring and honing stuff,but they had a ton of other good stuff.While that machinist worked there I sent a lot of work their way,and they bought a lot of oddball stuff that I have helped the subsequent machinists put to good use.They have a really good Serdi valve machine with a ton of bits,and they can bang out valve jobs including top cuts and bowl cuts faster then most other shops can do a single valve job.The down side to their work is that I need to hand blend it all since it leaves a big ridge where their bits stop cutting.I got them to order a few cutting bits to enlarge spring pockets and arbors to cut down valve guides,and they are happy to machine heads for bigger springs,and PC seals for me,but since their tool selection is limited I sometimes find myself mixing brands of components just to know for sure that they can do the job.For instance all my big roller stuff uses the 950 K motion spring because I know that they have the tools and know how to set that spring up in just about anything.All my flat cam race stuff uses the crane 896 spring becasue I know they have the tools to set that one up to.These sort of things are something you pick up along the way.
I used to hate the Serdi machine because I felt that it did a generic valve job and that a good machine shop could do a better job with custom taylored angles,I still feel I am sort of right,but I also learned that sometimes it just isnt cost effective to go for that last little bit when the money can be better spent elsewhere.Back when that race machinist was at the shop,we pioneered a setup that made good power for low price on a smallblock with stock heads.Knowing that most stock heads are beat to death and need everything,we found a way to take advantage of the Serdi machine's biggest assest,and that is speed.I came up with the idea of using feria 2.08" intake valves with 5/16" stems.He figured out a quick and easy way to set the guide reaming tools up to cut the guides offset and he would put bronze liners in to bring them back down to 5/16,and the entire job cost the same as doing regular bronze guides.Then he would piut the 2.08" intake valve in centered over the new guide.The difference was that we only had to lightly clean the chamber wall side of the valve seat and most of the material was taken from the side of the seat that face the exhaust valve.The Serdi machine had no idea it was doing such trick work,it was just doing business as usual.After the machining was done,I only had to do the heavy blending work on one side of the bowl and the chamber didnt need to be cut since the valve wasnt any closer then the stock 1.94" valve,and if I did cut it,it was to get even more flow.This solved a problem I was having with using 2.02: valves in stock heads with a lot of relief on the chamber wall which resulted in cracking.I could get the same flow with less work.The final trick was to cut the spring pockets out for oversized springs which also recentered the spring on the valve.All this trick work ended up costing no more then a regular rebuild and the performance was better.As for the rocker arms,the valve was moved about .030" over which was insignifigant in regards to roller contact with the valve tip.Had it been and issue,adjustable guideplates would have worked,but the truth is that I even did this trick on some heads that had no guideplates at all.
So I guess my point is,that maybe you need to find a shop that can do the work you need at a lower price.I also wouldnt run severe duty valves in a 500hp bigblock.If you were going to upgrade to 2.19" intake valves,I would go with a set of new stock replacement steel valves such as Speedpro.I would also notch the tops of the bores to closer match the chambers,otherwse you wont find any power.Aside from that,I think you could make the power you are looking for with a good valve job and light blending on the stock valves.
Good luck.