Is this normal? Dealership experience
 

I went to my local H-D dealership to have the ignition lock on my bike looked at since it's stuck. About an hour later they come back telling me it's an internal issue and that I need a new one. I told them I'd have to come back another day for that since part+install was around $400. The guy then proceeds to charge me an hour's worth of labor = $121 + tax. I'm not against paying someone for a service but I highly doubt this actually took an hour to diagnose. Did I get screwed?

You stated "about an hour". Yes, it would be proper to charge labor for that type of trouble shooting. However, $121/hr labor is to high, IMHO.

Check with your local Indy, order the lock keyed from the factory (you should have received a small tab with numbers on your keys at purchase). Use that and the factory will make a new assembly for your keys

Yeah...mechanics should spend their days diagnosing other people's problems for free. Try that at a doctor's office and see how far you get. If you think the labor rate is too high you're also free to not do business with them. As a mechanic, this entitlement mentality really pisses me off. If you cant afford to pay a professional and are unable to fix it yourself I guess the next move is sell the bike
You couldn't diagnose it yourself but you know when someone else does it took them too long?

If you read the post, you'd see I said I don't have a problem paying someone to provide a service. However I disagree it should've costed what it did to look at a key tumbler to tell me I'm shit out of luck.

If it is a late model Touring bike the ignition/fork lock comes out very easy. Look at a service manual, needs no tools, you might just need to pull it out and clean and graphite it.

Yes, the mechanic will get a dime on the dollar the dealer charges you.

Not sure you're exact issue, but have to tried using graphite to get it unstuck ?

Some places charge a minimum of 1-hr labor to diagnose anything. $121 per/hr isn't out of line. They should have ok'd that charge with you when they wrote your order up.

You got the "Chuck's Deluxe" service. That's where you spend over $100 (hence the H-D), and it's still not fixed.

Diagnosis is a service. You have two eyes and the mechanic has two eyes, the difference is he knows what he's doing and you dont. Diagnosis and repair are two separate services...just like getting your cancer diagnosed vs getting it treated. Instead of complaining here why dont you take it up with the service manager and mechanic?