You might also want to check out Sturmgewehr.com. Since subguns.com went to paid ads, the number of listings have dropped off. AR15.com has a full auto forum that has some knowledgable folk.
Two reputable dealers would be Kent Lomont (klomont.com) and Dennis Todd (dtoddmg@aol.com). Dennis kinda specializes in M16s and AR15s and usually has a plethora of uppers, extras, and doodads.
Prices for M16s have been rising faster than the stock market has been falling lately. Values to be had are Colt AR-15 model 614s (An M-16 marked AR-15, but a factory original full-auto). Infact autoweapons.com had a 614 w/ multiple uppers for sale. Pricey for a bunch of no-name uppers and looks to be refinished, but minty.
Premiums to be had on US Gov't Property marked guns, M16A2s and original shortys. Ask about markings if it is a police department gun (you might not mind the markings, but it would be nice to know ahead of time).
Number one wear factor are the holes for the firing control pins. You want them nice and tight - tighter than an 18 year old virgin. If the gun has mars or nicks, you can always get it refinished (if you don't want to collect). In fact refinishing the lower will allow a better color match with the current black uppers most makers offer (Early Colt's were dark grey).
Of course, if you don't have to have the Colt horsey, you can save bucks with a converted registered receiver gun from a second label. DIAS and LL are also an option.
Have your cash ready. M16s move fast, often multiple people making offers. Prices range from $4,500 (RR second label) to $11,000 (NIB Colt M16A2 marked "burst") depending on quality, orginality, rarity and condition.
BTW, $2k for a good condition SP1 is too much!
