Prius 2010 - smart Key fob is not working

I recently bought a Prius. i called a local fob key smith to make a duplicate key for my master key. he tried for 4 hours and could not make a new duplicate fob for the 2010 Prius. finally he left with out asking me money. but the car does not move and the master key does not work. The car does not respond to the original key and there is a car lock symbol on the dashboard. i waited for two days towed the car to the nearest Toyota dealer. The guy from Toyota said 300$ just to diagnose the car and let me know what the problem is. I do not know know the local key-smith did something and messed up my cars ECM or the Toyota is trying to make money from me. I am confused and do not know what to do . Please give me your suggestions, anything is valuable which saves me any penny???