Having just had the "pleasure" of rebuilding my Twin Disc MG5050 transmission, I would suggest there are some other considerations to this project.

First, unless the your Velvets are much lighter than my 180 lb Twin Disc, this is definitely a 2 person job to manipulate the removal/re-install, plus removal required dismantling a number of associated items just to gain adequate access. While the bell housing is removed from the engine(s) you might also consider replacing the rear engine oil seal. It is relatively easy and cheap insurance while the transmission is off. Lastly, the estimates seem on the low side. It actually required 11 hours of labor (mine plus a good mechanic: ie 22 man hours) to remove and reinstall one transmission with no wasted effort! The actual cost for rebuilding the Twin Disc was about $500 for labor plus $1,900 for parts (bearings, seals, clutch plates etc.) including parts. We did not even realize we had a transmission problem, apart from slight oil seepage at the transmission rear seal. Turns out the unit was about to give up, with worn clutch plates contributing metal particles to the bearings and seals. So, good news was we caught it just in time, even if it did cost about 3.5 boat units!!

I just swapped out a Velvet drive on my Lehman a couple of months ago. I had
bought a rebuilt one on e-bay, and have the CR2 drop center version. I can
tell you that the going rate on these in this area for a rebuild is $800 and
up, depending on what parts have to be replaced, so you're rebuild price
sounds good. Chris recommended replacing the rear seal, but you can't do
that on a Lehman as easy. I think the crankshaft has to be dropped down,
meaning it's a lot bigger deal to replace the rear seal than just popping
the old out an the new in. Pretty much, at a minimum, have raise the engine,
drop the oil pan, etc. I do agree that you should replace oil cooler, maybe
oil lines, damper plate, etc.

By the way, I had two young, strong mechanics do my tranny swap out, and I
think they had about 6 or 8 total man hours in the job.

Brent Hodges
43 Albin with SP135 Lehmans
Seabrook, Tx 77586