I'd be willing to bet they are. From a mechanic/ shop perspective, it usually isn't worth the time or risk to rebuild or repair most individual components. Rebuilding parts is not something often done, so you can expect the techs to be unfamiliar with it, so it's going to take some extra time. With shop rates near $100/ hour, it could very quickly be much less expensive to simply replace it. Not always, but sometimes. Out of an $850 dollar bill, how much is diagnostic, and R&R labor, or is that just part cost? It's also less risky to the shop to replace it. If you rebuild it and it fails, you're out the cost of parts (and usually labor) to repair it for the customer a second time. In addition, it gives the shop a shade of a black eye. "They rebuilt it, and the thing broke again!" On the other hand, if you install a new component or factory rebuild, if it fails a second time the part supplier will cover the cost of the replacement part, and often will cover at least part of the labor. In addition, it's easier to explain to the customer that "They sent us bad parts." Takes some of the heat off the servicing shop.
Not saying it's right or wrong, but often times that's the reality of it. For folks that are inclined to do their own repairs, repairing a part may be a good solution. For a shop, it's all to often not. I also wouldn't be surprised if there's a core charge on the valve assembly. If they were able to get a rebuilt valve to put in it, they will probably have to have the core to return. On the other hand, if the valve block/ manifold is aluminum like so many are today, it may have wound up into the shop's/ mechanic's scrap metal bucket.
Glad to hear they got it figured out though!
Throw in the labor - you'd be lookin' at a good downpayment on a new tractor! 
