Unfortunately no I'm not saying that :-)

First there's a typo ; the basic ML555 is $2200, not $1200.

Someone managed to synthesize a S1 (single-core T1, with multithreads support) for a Virtex 4 LX60. You might be able to squeeze a S1 into the Virtex 5 LX50T of the ML555, but I'm not certain, it mght be a bit short on available slices. Beside, it seems that they didn't go any further than that, and didn't actually try to upload the bitsream, let alone boot an OS. All that is assuming either the synthesized HDL included all required bits beyond the CPU to do so, such as a memory controller to access the on-board SO-DIMM and what-not, or that there's enough room on the FPGA to accomodate said bits. And that you have the IP of those bits, of course.

Then the T2 will probably be larger, even scaled down to an hypothetical single-core S2. I seriously doubt than you'll be able to squeeze a fully bootable S2 system in less than a V4 LX160. A PCI(-e,-X) board with one of those and some memory for your OS & stuff will probably be way over $3000. That's not counting the software tools, as free version of the tools are limited to the smaller devices, and the already mentioned IP that might be necessary...

Plus, you'll need the skills to bolt all the HDL, software and tools parts together.

It's likely doable, but at a very high cost in both money & time.