Did I pay too much for repairs?
I think one thing is for sure, they did not communicate to you effectively. Regardless of whether the bike really needed all that stuff or not, they failed in this regard. At my shop, if a repair exceeded the estimated cost by even twenty or thirty dollars we would contact the customer and wait to do it, unless we happened to have a particularly close relationship with them. Our customers were mostly students and postdocs on fixed incomes, so it was imperative that we be sensitive to their budgets.
As for the line items, it seems strange that they charged you for a freehub body kit, but did not replace the freehub? At least, from your description you say they couldn't fix the lateral play in the cassette and told you it didn't matter (which is true). So did they replace the body or not?
Bearings: it's always nice to have fresh bearings, but they are not like brake pads that should be replaced at the first sign of being worn out. A cartridge bearing will develop play that will get worse over time – it takes time for it to become catastrophic. I would occasionally open up loose ball bearings and squirt some grease in, but I wouldn't ever press in new cartridge bearings without warning the customer. If nothing else, that conversation would be a chance to up-sell them on nicer bearings.
As for the chain, it actually is essentially the same amount of work to replace it as to shorten it, so it's not all that unusual to me to just charge the same price for either.
Not sure what &quot;gear out&quot; means, nor a &quot;cycle safety check.&quot; We would check every bike first for safety, for free – that's the only way that we could assess what repairs, if any, were needed. The only thing we charged for was actually fixing problems.
There's a lot of typical bike shop invoice bloat there that doesn't look too wrong. But the point is that the bill was almost three times as much as the estimate and that's no good. There should have been one, if not multiple phone calls made. This is exactly why my policy was to never do a repair that was more than $100 without printing out a detailed itemized estimate for the customer and explaining where things could go wrong that would affect the final bill. It's always in the mechanic's best interest to be forthcoming about the bill.
If you want to have a conversation with them, I'd suggest not mentioning that you came to the internet for advice. I also wouldn't necessarily question the repairs that were or weren't done. Mechanics always get defensive – ego is our weakest trait. Rather, just be explicit that you are disappointed – not mad – that they didn't give you the opportunity to sign off on the repairs, and that you happily would have agreed to the charges anyways, if they'd just let you know ahead of time (even if this is a lie, it'll make the conversation easier). Obviously, this is if you're still interested in using their services in the future.
edit: why are there so many different labor charges? My instinct is to defend bike shops but I don't feel great about this shop.