Moff_Tarkin,
Because the rules do not specify what materials are needed for item creation (as you yourself noted), your difficulty is entirely a matter of DM fiat.
Even a non-magical material can easily be made more expensive through rarity. Say, for instance, that in order to add an enhancement bonus to a suit of armor, it requires a petal from the non-magical Iron Lily. The DM need merely remove nearly all of the Iron Lilies from his world, and their price will rise accordingly. Not because of any magical property, but merely because they are difficult to come by, so people who go to the trouble of obtaining them will want to be paid for their effort. (Note that many real-world commodities are valuable for the same reason: rarity.)
It seems safe to say that your DM wants to play a low-magic game, and is setting rules in place to make sure that the PCs will be low-magic, as well as the game-world in general. Therefore, he's made item creation twice as expensive, figuring that you'll therefore only have the resources to craft half as many items as the standard item creator.
You will still have the same advantages that any item creator has: the ability to craft magical items to your party's exact specifications, rather than hope to loot something useful from whatever random treasure comes your way. You will not, however, be able to sidestep your DM's desire to run a low-magic game by crafting a standard level of magic.
If this is truly unacceptable to you, I suggest you speak with your DM and ask whether he (and the other players) might be willing to run a standard magic game. Failing that, as dcollins suggested, see if your DM will allow you to trade out your item creation feats, since you weren't fully aware of the situation. Failing that, you'll need to judge whether you'll still have fun given the DM's house rules.