That's crazy! If you're inclined to keep it, Rockauto [0] is a cheap place to get auto parts, and often cheaper than the local stores for the same stuff. $368 for a Walker cat for an '08 Element [1].
I know that some repair jobs can be a lot because of how modern cars are designed, but if the labor is a couple grand (sounds like it is), that sounds extreme.
If you live in a civilized state where there isn't mandated annual vehicle inspections, you can just go to a shop in a poorer part of time and most of the time they'll weld in a straight pipe so you can hook up the muffler again. Quick, cheap, and good enough.
