Midway has 686 cylinders for $120 - 6 shot versions. You could call them about the 7 shot version. There are a number of regular (e.g., 6 shot) used 686 cylinders for sale at Numrich's, eBay, etc. as I look now. The 7 shot cylinder appears to be a little harder to find. But new or used, probably around $120-$150 would be my guess.
TK Custom will charge $150 to machine a cylinder. I had them machine my Mdl 640 and they did a great job. Moonclips take a little for time to work with and appreciate, but there is no way to reload a cylinder faster than with a moonclip.
The $300 cost from S&W doesn't seem that far out of line... I've always been happy with the work I asked them to do (at my expense, in the past, like replacing a revolver barrel with a longer one) was always done very well, if not for the lowest price.