There is yet another option for an Empire 298, but it is more expensive. There is a wonderful engineer name Mike Paschetto who owns a company called Analog Engineering that can take an Empire 208 and turn it into an AE 2008 -- the details are available at analog-engineering.net. I had this done with a 208 last summer, and it came back as a gorgeous piece of equipment. But, it costs $2495.00 to have the upgrade work done, and then you have to add a tonearm and cartridge on top of that.
I have done some simple restoration myself on a 698 -- so here's some suggestions for the 298 -- you should check to see if the bearing is still properly oiled -- if not, Singer Sewing Machine oil is a good, inexpensive choice for lubricating the bearing -- as I recall, it is about $15.00 a bottle. Replacement belts for the 298 are readily available online from several sources, and shouldn't cost more than about $15.00 or so (the original part number is DB-208 and the belt is a flat belt with a 35.1" circumference). Replacement grommets for the suspended motor are often available, off and on, through eBay. Your big issue is the motor itself -- is it in good operating condition and will it maintain speed -- if so, you are in good shape. If not, getting it refurbished or finding a replacement may be tricky. If you just need a belt and bearing lubrication to get the little puppy operating, then you can take the rest of the money and purchase either a used cartridge here on Audiogon or a good basic cartridge from someone like Needledoctor (a Grado, Goldring or Denon, for example) and stay within your five hundred dollar total budget -- just take care to make sure the cartridge weight is compatible with the 298 arm's weight range (sadly, I don't know what that is).
As you can see from the other responses you got, if all this is too much to take on, you can always sell the table and use the proceeds to buy something modern -- be sure to check market prices before selling -- as the interest expressed on this thread demonstrates, a 298 in good condition is a desirable item.