Yes, it is VERY common. I have a hard time believing the prices your dealer quoted, but if it is legit, let him do it. However, I think the Pivot Works kits for the bearings would cost about $200 (just parts) if everything is bad.
Remember, don't just lube the squeeky bearing! Go ahead and do all of them while your at it. A 2001 with only light riding time is ready for this job. BTW, I rebuilt the rear end on my brother's KDX a while back and he needed a new lower linkage arm b/c it had gone too long. You really don't want to get into buying those kinds of parts b/c they are VERY expensive. I think it ended up costing him well over $400 in parts, my labor was free (well, maybe a six pack :)).