Dish will only upgrade for FREE if the channels you subscribe to, as in pay for--NOT Public Interest Channels, and KBS is ALSO considered one of Dish's freebie public interest channels-- if that sub was already a subscriber to internationals that will be migrated to a new slot.
For example, I have been a sub of TV5 for years. Dish was moving TV5 from 148 to 118.7. So, Dish provided all equipment and labor with NO ADDITIONAL COMMITMENT so that I could continue to receive all the same services across all my STB's as I did at the time they sent out my FREE upgrade notice. I had a Dish 500 for 110, 119; a Dish 500 for 129; and a Dish 500 looking at 148. They changed all that out for a Dish 1000Plus with all new LNBF's and cables, almost an entirely fresh install . If necessary they will upgrade STB's--WHATEVER IT TAKES to provide you with the same services at the time you are approved for the upgrade on all your STB's at ABSOLUTELY NO CHARGE AND NO ADDITIONAL COMMITMENTS--IF you are already paying for that channel, even if that channel is not an international.
I believe your problem is that you were not a subscriber (paying subscriber) to any of the internationals, otherwise you would have been notified and Dish would have made the upgrade for free. Just because you had access to an open (meaning all subs can view it, no matter what tier) "Public Service" channel, KBS, does not qualify you for the free upgrade.
So, in your case it is correct that the 2 options provided by Dish are proper (otherwise it would have come up on the computer that you are an international sub who does qualify for the free upgrade). It is too late to subscribe to any internationals still left at 148 (less than 10 left, I think) as Dish stopped installing internationals for 148 over a year ago and 118.7 is the only international install they make, now, for quite some time, now. Sorry, it will cost you money. But if you are a DYIer you could get the parts together and save some money and install yourself.
Please keep in mind that the internationals (and LIL at this slot) satellite at 118.7 is an FSS Ku band satellite, NOT a DBS satellite. Therefore, none of the legacy or DishPro LNBF's can receive this sat. Dish uses a special combination LNBF that receives both 119 and 118.7 in one LNBF. Also, a larger Dish in needed to receive 118.7 because as a FSS Ku sat, it operates at a lower power than DBS and a larger dish is needed to get sufficient signal strength to receive the channels on that sat.
Good luck. I hope you find a solution.