I live in NY also, and just to dispel any rumors there is no exhaust test for for 1st gens.
NY inspection is $10 for diesels, $25 for other vehicles with emissions tests.

For the last 5 years I have taken my diesels to the same place for inspections and I am literally in and out in 11 minutes.
Its just a basic safety inspection. Brakes, lights, rust, windshield, etc.

Take it to another shop, that is bull shot. He is just being a dick. Shops dont like to do inspections because they dont make any money from them, unless they get to do a repair.
A full NY state inspection requires removing at least one wheel....how can they do that, test all the lights, road test brakes, etc. all for $10 and still make money?

You need to find another shop.