I was at a local gun show this weekend and I saw an Iraeli AR-7 conversion; really cool gun but $500 was too rich for me.
Here is a link to the Wikipeadia page that has a photo.
http://en.wikipedia.org/wiki/AR-7 What is this "conversion" of which you speak. Was the AR-7 formerly Protestant but now Jewish?

Does that mean that they snipped 1/2 inch off of the barrel?

The AR-7 should be around $200 or so. List price is $225. What could they possibly do to it to double its price?