Dude, he just told you what you thought was a $500 job is actually a $100-$150 job. Mechanics don't often save you money. I'd tend to believe him.
If you're wheel bearing were going (and I had one fail once) when you turn in a certain direction it will get louder. So, if you turn hard left or hard right it should get louder in one direction, but then seem to go away in the other, because you are either putting more stress on the failed bearing or taking stress off of it, depending on which way you turn.
If your pads have failed to the point that they are now laying against the rotor and ground goves into it... they could cause a lot of grinding to. (I've had this happen before as well) Once the pads ware through to the point that the rivets poke through, they start to grind groves into the rotor. Then the rives fail, the pad false lose against the rotor, and now you have a pad with metal spikes sticking out of it, laying against your rotor... even when you're not applying the brakes it's pretty loud.