Let me tell you I am going thru the same thing.  I am located in NY and 
so far I have gotten the following prices:
Pep-Boys:355.00 + exchange + alignment + 3 hours labor
WesternAuto Parts America : 299.99 + exchange
VW: 950 for entire job
Sears:850 for entire job

Without the exchange, there is a $100.00 added charge but you get it back 
when they receive the old part.

Also keep an eye out for rebuilt ones.  From what I hear, the rebuilt 
ones are just as good for half the price.

Nate El Great
85 7-passenger

On Fri, 28 Jun 1996, Christopher P. Gibbs L.B.I.P.P. wrote:

> Date: Fri, 28 Jun 1996 12:35:10 -0500
> From: Christopher P. Gibbs L.B.I.P.P. <cpgibbs@ptialaska.net>
> To: Multiple recipients of list <vanagon@lenti.med.umn.edu>
> Subject: Steering
> 
> Hello All,
> 
> Hi I'm Chris Gibbs, another Brit' living up here in Ketchikan, Alaska.  
> I came accross this list via the Westfalia Owners Page!
> 
> I have an '88 Westfalia with around 250,000 on the origional engine, no 
> re-build yet(other than new heads about 12 months ago).  Other than the 
> usual problems the vehicle has been superbly reliable and easy to find 
> parts for and repair.
> 
> Alas, about 2 weeks ago I noticed a small pool (P/S fluid) under the 
> power steering rack, "its grown since then."  Well, I called the usuall 
> VW sources that I know of on the west coast and got basically the same 
> answers.
> 
> The VW dealers are all asking for the old rack in exchange for a new 
> one!  The new ones are coming from somewhere over on the east coast?  
> All said that the racks are back ordered!  Oh yeh, they wanted $850 plus 
> tax plus the old rack in exchange.
> 
> Does anybody know where these replacement racks are coming from?  Is 
> there a way to get my old one re-manufactured?  With me being stuck out 
> here I am at the mercy of UPS & FedX anyway, so it doesn't matter where 
> the service or parts are coming from!
> 
> I hope that someone can help, thanks for listening!
> 
> Regards,
> 
> Chris Gibbs
> Ketchhikan, Alaska.
> 
> PS.  If anyones interested I've found a supplier for really neat propane 
> heaters that fit under the rear bench seat.  They're from the UK, use 
> virtually no propane and come with a nifty little thermostat that you 
> can put up on the wardrobe of a Westy.  Mine cost me about $500 
> including shipping (worth every penny up here too)!!!!!!
>