Let me tell you what a friend of mine would have charged you and he does fencing for a living. For a standard larch lap fence he charges £90 a post .. £90 a panel..£90 a post ..£90 a panel .. on and on...
It sounds as though your neighbour bit off more than he could chew.
Offering to do the job in the first place, it sounds that he was capable of doing it ... so fair play to him. It seems he wanted to do the job without thinking about payment... He just was'nt expecting to spend all day doing it.
He has learned his lesson now and wont offer quite so quickly again. I have been in the same position ... You never know how enthusiastic the person who fitted the post initialy, got with the concrete (Not everyone uses a weak mix). So if you dont have the right tools for the job, it is often not wise to proceed in the first place. You never know what lies at the end of a post until you start digging.
None the less he was good enough to do it and in the process no doubt got covered in mud and ended up with an aching limbs. He got the satisfaction of completing a job he knows he would have flown through 30 years ago.
I would ask him what you owe him for his efforts. If he says 'Dont wory about it' insist and ask him what wine he likes.
Personally I think a bottle of wine is a bit of an insult ... 2-3 half decent bottles would be more like it.
Think about what it may have cost if you got a fence man out !