Sorry Bro.
People really overprice there stuff because they think its better then what it really is, just go to craigslist and you will see all the philistines. If you are looking for a body-only K-7 then you MIGHT find one at that price but it wont be easy. The K-7 is still a very new camera with timeless features like WR, even older bodies like the K-20 still sell for 500 bucks and more on KEH.com. Also be aware that if you find a K-7 for 500, it will most likely be in a condition you wouldnt like very much. Perhaps if you have the time, you will wait for a new Pentax body to come out so the price of the K-7 drops. Many people think a new pentax body will come out or at least be announced by early 2011.
Hope I could help, good luck