I have held off commenting as my K10D was in at pentax for a shutter replacement. (I don't know what happened but it developed a problem with the trailing curtain hanging up on the leading curtain)
Anyway, I have a similar labor charge and it looks like a flat rate,
BUT there are some things to consider.
my repair, or any repair, would take 1-2 hours, and even if it is 2 hours, the flat rate of $100 per hour is cheap, considering the special equipment they need to repair and test the cameras, plus the clean room environment they need for performing the repair. What is the hourly rate for your car to get fixed? probably the same.
also, and while I like to thing I take care of my cameras, after 3 years the K10D was dirty. there was dust in the view finder and on the external part of the body, and some dust probably on the sensor.
It came back spotless, looking like new, except for some wear on the strap eyelets, and hot shoe.
A good cleaning is about $75 all by itself.
best of all and this may be because pentax canada has their office close to me, so I can drive directly there to drop the camera off, they had the camera for exactly 10 days (to within the hour) this spanned a weekend and a mid week national holiday.
What's the down side? sending the camera out the same week the K7 was released tweaked my CBA. so between the K7 and the repair bill I won't be getting any new glass any time soon