Is it possible that the tonearm simply rotated in its mount? It is S-shaped, and a rotation would cause the curve to then point it "down" toward the platter (inversely, if it rotated the other way, it would be pointing "up").
The reason the tonearms are in limited supply is simply that the units are so new (relatively) and the parts being manufactured are destined for production units, not repair stock. As for the price, much like if you were to try and build almost anything by buying all the parts individually, the cost of the parts off-the-shelf are always greater than the sum of the parts in a new, complete, product. I'm not trying to justify the amount that Pioneer DJ is charging (seems steep to me as well), but we all know how it goes with supply & demand.
Unfortunately the crew here on the forums can't do much in the way of getting you a lower price on hardware repairs, but we can pass along your comments to the product managers and planning teams, especially if this is something that can be improved upon, and I can see the need for supply and cost being something the customer would like improved. Your best bet is to continue communication with the repair shop and ask them for updates. Sorry for the inconvenience!