Wilshire, your book turned out great! I'm sorry for totally bailing on the thread when you first started the project. Using a woodburning pen is nice because it gives you a lot of flexibility, and makes each copy unique. The downside is that with dark leather, you don't get the nice contrast you do with light, but now I'm wondering if one could gild the burnt areas with foil in a similar fashion to illuminating a manuscript, and how durable the results would be. Hmm. I may have to experiment with that tomorrow.
Example of burnt-in design on light leather:

I don't mind questions at all!

$1000 per book seems high to me, but several hundred dollars per book is very reasonable. If I was commissioned to do a set of books with custom cover art resembling the original hardcover art I would probably charge about $500 per book as well, because I know how expensive supplies can be and how much time something like that would take. I was going to suggest you find and practice on cheap hardcovers from yard sales or something. You don't need to shell out a ton of money for high-quality supplies for practice books, and it will give you a feel for whether or not you want to do the real thing. I say go for it! It's so satisfying to complete a project like that, and then you have the skills to repair books as well.

If the book is hollow-spine (where the text block is not directly glued to the spine of the book. Most hardcovers are like this, as it's not as hard on the spine), you can just use a craft knife to cut through the paper that attaches the text block to the book boards. If it's a decent quality hardcover, you might also be cutting through a fabric that looks kinda like cheesecloth, which is called the crash. That's all you need to do to liberate your text block, though like you noticed, it might not be neat and tidy. That's the bad thing about re-casing a book, but it's still workable. If the text block was sewn, and not just glued together, you shouldn't have to re-sew it. I would advise against it actually, as there isn't really any reason to re-sew a book whose stitching is in fine condition.

I just go to the leather supply store in town (Tandy) for my leather. A full goatskin is about $50-60, and I can get 2-3 books out of it, depending on the size. Goatskin is probably the cheapest book-quality leather to work with, but unless you get pre-split skin (additional expense), you have to thin the leather yourself so it's thin enough turn in the edges and not look lumpy and ugly. This is my least favorite thing to do. It's messy and tedious.
You can order from an actual bookbinding supplier, which is probably your only option for a lot of materials, unless there's a good art supply store (like Dick Blick) where you live. http://talasonline.com and http://www.hollanders.com are good suppliers. I order from Talas because I do a lot of antique conservation as well and they have bookbinding and archival supplies.

If you aren't comfortable with your artistic abilities, maybe you could find a local artist? If there's a Tandy or equivalent where you live, I would go talk to them and see if they might have ideas or know local leather artisans you could contact about working with. If you live in a college town, check the art department's catalog and see if they have a book arts course. The university here offers a book arts class, which of course, I didn't know about until after I started bookbinding on my own. Figures.

I can post some pictures from a re-casing project I did a few years ago if you'd like. It's not quite step by step, but it does cover the project at many steps.