LCD, Your price estimate are much lower then what it is today.
" Materials are only about $50 or so including recharging the refrigerant gas, so for 5 hours work he is charging you $330 per hour."
$50 won't cover the cost of more then a few pounds of R22 today.Plus you need a filter drier,that is not covered by warranty, could be a warranty handling fee of up to $50. Could require two people.
"Unless it is a very badly designed unit, 5 hours is way too long too - typically you are looking at 2-3 hours to remove and replace the evaporator and recharge the unit, so about $300-600 in labor depending on the access to your unit demands 1 or 2 workers." Depending on the location of the coil, could take a lot longer with two people.
"I would get another bid (which may have to be from an authorized service company to get the free evaporator replacement). That in itself is not necessarily that big a deal - they typically run only $150-300 new." Coils today are as high as $3000 for a 3 ton unit, had a 10 ton recently that was $10,000, fortunitly it was under warranty. When an out of warranty coil fails, the job is half the cost of a replacement system ,or more.
"Also, if you have a leak, where is it ? A lot of evaporator leaks can be repaired unless it is split or generally corroded, and at 2 years old that should not be. You may just have a pinhole leak that can be brazed and the unit recharged - about $200-300 if the leak is in a place he can reach to fix. "Most coil leaks today are due to Formicary Corrosion, an are not repairable.
LCD , I have been in the trade since 1965, in business since 1975, and your information on prices is from some time ago. I can't justify the price of coils and refrigerant today, but it is what it is.
The location may have very expensive labor costs as well.