Nathan, Jenifer(Millstone),and others are right; essentially, the 'further away' it is, the more it may cost to 'go after it' and properly remove it.
That said, I think that sounds mighty pricey! I had a full cryptorchid(neither EVER in evidence)done, at about 1 1/2 years of age(he was a SCREAMING IDIOT, apparently not unusual when the testicles are fully retained-so I wasn't waiting to see what might happen....) This was over 10 years ago, and cost then was around $500(his weren't far 'above' where they should have been, thankfully!) More recently(@ 3 years ago), I had a monorchid(one retained)-waited until a full age three, was quoted between $250 and @ $900, depending on how 'far up'(and hard to retrieve) it was...luckily, it wasn't far; cost was just under $300, complete. Since prices do seem to be higher in the NE, perhaps the quote you got WAS a 'worst, worst case' scenario---but I'd surely be checking around! Has the horse ever been sedated and the missing parts seached for? Is he a full crypt, or a mono? That could make a difference.
Good luck, no matter what!
Margo