"reasonable" is a relative term here. If they can show 15 hours of attorney time, then $4k to $5k is reasonable.
Unfortunately, there is nothing rare about the bank increasing it's payoff demand as housing values increase.
Chapter 13 is a possible way to forcibly cure the loan; you would pay the arrears over five years and wrap most of your attorney fees into the plan. We can usually get people into the office in a day or so for these.
Short sales are optional. Lenders are only willing to consider short sales if they feel the offer is at fair market value, and they believe you have a hardship to justify requesting forgiveness on the loan balance. Once a bank receives a short sale offer, they will do their own "BPO" or broker price opinion of the property. If you lose a buyer, and present a new offer 4 weeks later, the bank may do a new BPO, and in an appreciating market, the bank may counter that they want a higher offer. If they ask for a cash contribution, it is based upon what they believe you can bring to the table, but this is often negotiable. You should be working with an experienced short sale realtor on your behalf, and certainly a NV real estate attorney as well. Ask upfront what the legal fees and make sure you have a written fee agreement. If you want to stop the short sale process and reinstate the loan, you need to obtain a written reinstatement quote and make sure you reinstate prior to the foreclosure date. The first thing to do is to have a consultation with a NV real estate attorney as soon as possible.