I went to Rangoon last fall (on the $600 BKK fares -- thanks FT!).
I was also very surprised at the prices. In Bangkok I could get a very filling lunch for $0.75, but in Rangoon the only natives who could afford to "eat out" were members of the military junta.
Shopping at the markets I found much better prices, though the exchange rate fluctuated wildly depending on how recently the police had visited.
The high point of the trip was the "Circle Line" train trip around the city and suburbs. It was not very comfortable -- we sat on wooden slats and the only refreshment was a boy with a bucket of water and communal ladle -- but it was our best sense of the "real" Rangoon. I gathered this was how the middle class commmuted (poorer people took the buses and endured the pollution). Round trip was half a cent for locals, one dollar for westerners -- and I guarantee you will be the only westerner on board. "First Class" is a rope draped across the last boxcar; seating arrangements were enforced by people with guns.
Bring lots of cigarettes for the soldiers, candy for the children, and expect a lot of stares. Men literally fought over our refuse (empty Marlboro pack from the US), and the kids loved our JAL sweets.
We traveled to a temple accessible only by boat on the way to Bagan; I will definitely go back as soon as possible. Next time I will bring more cash and more candy.
dcr