Now I know there are expensive locks out there like Baldwin and they run
$200 or over, but that includes the handles and hardware. Can a mortise
be
actually $250 on a nameless lock? Can he be trying to rip me off? He
would
not tell me where he found it or what brand it is.

If he tells you then you don't need him any more. He probably has found a
new lock assembly rather than parts. Since it is much different than todays
locks it is expensive. You can fit a modern lock to your door if you wanted
to modify your door.