After a little more research, I see that the website I linked in my previous post actually covers "Expanded Middle-earth", the non-canonical subcreation made for various Middle-earth role-playing games. I still use it for reference though to color my characters a bit more.
A more reliable source would be the following:
...between TA 2190 and TA 2590 the Grey Mountains were the seat of Kings. In TA 2589, however, the Dwarven halls in that region were attacked by cold-drakes from the north. The King at the time, Dain I (TA 2440 -TA 2589), was slain along with one of his sons, Frór (TA 2552 -TA 2589). His older son Thror* (TA 2542 - TA 2790) fled with his people to the Lonely Mountain.
*This was Thror, Thorin Oakenshield's grandfather
It would seem here that the last Dwarf civilization in the Grey Mountains ended in TA 2589. The current year in LOTRO is 3018, so again, I don't think it would be possible to have a 500 year-old Dwarf. The last canonical mention I can find of the Grey Mountains refers to Bolg leading the goblin army in the Battle of Five Armies in 2941 from Mount Gundabad through the Grey Mountains.
By 2941, the Grey Mountains were inhabited by numerous Orcs. The army of Orcs and Wargs assembled by Bolg marched from Mount Gundabad through the Grey Mountains and descended upon the Lonely Mountain from the north. They were defeated by the Dwarves, Wood-Elves, and Lake-Men in the Battle of the Five Armies.
It looks to me like Turbine just made up the Grey Mountain origin for Dwarves possibly because they wanted to offer more choices? Hopefully someone who is more of a lore nut than I can give you a better answer.
[CENTER][SIZE=1]MINSTREL and member of the vocal minority[/SIZE][/CENTER]