It should not cost anywhere near 500 dollars to determine if there are bent valves due to this. It's a matter of bringing a few cylinders up to TDC of the compression stroke, applying air through the spark plug holes, and then listening for air hissing back out the intake as the intake valves are the ones that usually get bent.
Another method is to pull a valve cover and check for excessive lash on the intake valves as bent intake valves will prevent the valve from fully closing. This in turn creates looseness in the valve train.
It sounds like for 500 bucks they're wanting to rip the motor half apart and this is not necessary.
If the engine ran well before with no oil consumption and knocking you could try rounding up a pair of used cylinder heads and install those. Odds are the pistons and rod bearings are fine even if contact was made.
Any nicks in the piston tops should be rounded off with a die grinder, etc. to rid the pistons of any sharp edges. Any sharp edges left in place can create detonation problems.