I replaced the compressor on my Buick Century two years ago, also converted it to R-134 at the same time. Didn't cost that much by far (maybe $300)
I got a remanufactured compressor from Autozone for about $150. The compressor on a caprice is a different model but I can't imagine them being much more expensive since they're so widely used.
To convert to R-134 I replaced the compressor, accumulator (the can-like thing) and service valves (screw-on adapters) then had a shop change the evaporator tube, and flush and recharge the system. Shop bill was like $120, and that car was COLD, colder than many new cars.
That price quote sounds like something a dealer would give you, I'd definately get it looked at by an independant mechanic.
I'd go to a salvage yard for the fan clutch, or put in an electric fan (which will probably make your A/C colder at idle than the mechanical fan)