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I think this is a very interesting concept, but I wonder how practically possible and feasible this is without resorting to secondhand bargain hunting or rifles bought many years ago.
For 500m. 22LR will have to be shot like a mortar, 17hmr is too light, 22mag is better but still too unreliable. Realistically you need to be looking at 223 or 7.62x39. The cheapest 223 is either baikal IZH 18MH or norico bush ranger, both about 450-500. I dont know if you can still find 500 dollar SKS. However, none of these 3 rifles is likely to give you the accuracy needed for this competition.
This is not to say that you will never find an accurate example. You can, but it comes down largely to luck of draw. there may be one accurate cheap centre fire in every 20. Who is going to go through 20 to find that accurate example?
This can also function as an educational exercise.
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