A) Tech does not care what you spent. They care you built a safe car with all the items on the tech sheet coverd from the cage to tidying up the wires.
B) BS inspection cares how well you met the spirit of the $500 rule and Lemons in general. This includes everything from the car you chose, the effort you put into improving non-reliabilty and safety iems, the level of awfulness the platform you chose is, and assessing the the chance your team are a bunch of jerks that will be cloging up the penalty box.
C) You should care about being in the spirit of the $500 but not focus in it too much. You are not going to win the first time out. Enjoying the whole Lemons experience and your time on track is more important.
D) Don't rebuild your motor, bring a spare. Saturday night engine swaps are rite of passage. If you want, practice at home by swapping your spare into the car ahead of time so you can run it on test and tune day...then you have a "known good spare" that came out of the car. Though I am joking on the last part...its kind of a genius idea.