If you want to travel cheaply, then fly to Beijing and take the bus to the border and then the train to Mongolia from there. I promise that it will cost less than getting the various visas and taking the train across Europe.
The prices you have been quoted are from which company? They include markups; whether you consider these markups to be excessive is for you to decide. I certainly can't tell you that they are ok. Despite my love of Russia and long distance train rides, I would personally never choose to spend 5 days traveling by train across Russia without making some stops.
Below are the actual costs for the visas; all this information was found on the website of each embassy in London. All of these actual costs are based on your delivering the paperwork and regular processing time, which is generally about a week for each visa.
Actual cost if you applied yourself for the Belarus transit visa is 63 pounds. (you must obtain the Russian tourist visa first)
Actual cost of the Russia tourist visa is 75.3 pounds plus 7.40 pounds if you want it returned by post
To obtain the Russian tourist visa you will need "support documents". These documents will cost you 15 pounds.
Actual cost of the Mongolian tourist visa is 40 pounds.
Actual cost of the Chinese tourist visa, double entry (not sure why you need double entry) is 79.50 pounds plus more if you need to have it mailed back to you.
2nd class train ticket from Moscow to UB is more difficult to determine that actual cost. I can't find an actual ticket price, but what you quote seems high. Svezhy Veter, a Russia based company, quotes a price of 376 USD which is about 230 pounds. Try contacting Russian Trains for more price information. I am pretty sure that they charge the actual price of the ticket plus a handling fee which is fixed.
There are only two trains per week from Ulan Bator to Beijing. One is the #4 which starts in Moscow and departs UB on Sundays and the K24 which departs on Thursdays. Tickets should be purchased at the train station, probably a couple of days in advance. If for some reason, there are no tickets, it is possible to take a local daily train to the border, cross the border and then take a bus to Beijing.
For a ger stay, try contacting a guesthouse or gertoger.org.
Ruth