I have heard of this, seems to happen more in areas where KTM's are not as abundant. In the northeast seems that most of the KTM dealers also deal with jap brands, and are in direct competition with one another, so it tends to keep em a bit more honest. I got my 520 for MLP, at the time it was $6495. I think that is reasonable. If I'm not mistaken, MLP on them now are $6995. if they want more than that, shop elsewhere.
Just to ad some more on the 400/520 debate; When racing in an event it definatly takes a bit more energy to 'meter' the 520 through tight sections, and of course to hold on in the straight sections, so over-all, I agree that it takes more physical energy to ride the 520 than a 400. In a 40 mile H/S, rider fatigue will cost you in lap times.
But, on a non-competitive note, the 520 is a blast to ride!
So, if you plan on racing, you'll need both, the 520 for recreation/practice, and a tricked out 400 for competing. ( I'm still saving for a tricked out 400):(