welcome to the wonderful world of teh rotary.
i would say their quote is reasonable, however, IIRC its about10 hours to R&R the engine.
are they rebuilding, or are they swapping out? if you have gotten it the LEAST bit hot (which it sounds like you have) i HIGHLY reccomend doing an exchange. get a reman unit for it and swap it out. if you havent or the shop hasnt ever torn down a rotary....you are in for trouble. they are not the car to learn on.
isnt autodemics the RX shop up that way? if so....thats a pretty decent price. these engines are not a DSM. dont be a jew....