I think you may have nailed the problem perfectly. Some shops will gig you for whatever they think you'll pay for. On the other hand, some say the timing belt should be changed at 7 years or 105,000 miles, whichever comes first, so this shop could be following that guideline.

I lucked out in finding a guy with a small shop who is a retired Nissan Master Tech. FWIW, he just replaced my A/C compressor and I asked him about my timing belt since my '02 has 95K miles on it and he said changing it at 105K miles would be fine (in other words, he didn't mention the 7-year thing).

The guys that do the "Car Talk" radio show have a page on their website where you can enter your zip code and find customer reviews of mechanics in your area. I've had good luck with it and suggest you use that site or another review-type site to find a mechanic people believe to be honest, then take your X there and get a second opinion. It may cost you $50-75 but if it saves you hundreds, obviously it would be well worth it.

Another lesson here is to get a mechanic to check the vehicle over before you buy it. Good luck, and please let us know how it works out.