If those two bores either showed evidence of cracks or coolant ingestion due to cavitation/pitting and the like once they started working on it they should have at the least made you aware of it, and the potential remedies and talked it over with you at the very least before just going to town and boring out and pressing in new sleeves I feel like. And I don't think it's any fault of yours just to be clear, but if an engine guy can look at a crankshaft and determine it's going to need at least .020 under to clean up I would start questioning the rest of the engine as it's at first glance had a tough life or lack of proper care at best. I'm not trying to bash an engine shop but their practices sound marginal at best, and they either aren't very big or not well versed because any engine shop I've ever walked in to that does performance work has had an in house balancing machine. But that's also what confuses me more, Is this guy knew or suspected it would need balanced (truthfully it's cheap insurance and good business especially when you're doing component changing from factory weights) and at the cost of grinding, reworking, sending out for balancing and installing did it anyway. But for arguments sake it's almost a damned if you do, damned if you don't kind of deal. because at the cost of reconditioning your existing parts and buying new rings, bearings, pistons, etc. you're going to have several hundred dollars in your bottom end, but on the other side of the coin for a few hundred dollars more you can buy a rotating assembly that's ready to go. So what it really boils down to is your intended use, because those factory parts will run a long damn time when they're made to be good as new. So the point i'm trying to make here, is communication could have went a long way with your engine.
As far as converting to a 383, yes there are additional costs involved, as the block will need clearanced for the extra stroke and the connecting rods will need material removed to clear the cam, and if you do only say two rods that need material removed to clear the cam now you have to do all 8 the same AND then have to have the rotating assembly rebalanced accordingly. So there is extra cost in both the parts and prep work to make it a 383, which dollars wise, he probably wasn't out of line on. At the end of the day, when you're spending a couple grand plus, you want to have a warm, fuzzy feeling about it. and the way they went about it understandably doesn't leave you with that. They need to make it make sense so you can feel good about it, and if it's got a warranty, that would make me feel a little better about it. There's a lot of good advice in this thread already, some of these things are just my .02, respectfully.