I would really say to put in the time and money for another box of WEs if you're serious about playing them. Your numbers shouldn't need to be that low and it will hurt you.
In a 500 point force I've found 2 Sentinels to be a max. I often played my SBG WEs with only one at that point level, but then he's so much of a prime target that the second is nice backup.
I have not found the Banner for the Wood Elves worth the points at this level. Sometimes in larger games. Because they are the cheapest of all Elves you often don't have the outnumbered prob that Elves normally suffer from, you have a high Fight value and you have spear support options. The banner is a point sink when you need numbers, and the numbers will more than make up for the lost banner.
For Heroes, At 500 points, you may be able to get away with just Leggy though a second Hero does help. If you drop the banner, use the points to upgrade your captain to Thranduil. He's not really that much more in points but a lot more in quality and I think you'll really appreciate the difference.
He's a deadly shot, has very good combat abilities and his Special Rule can be a game-turning event if timed right (not quite as good as a well placed Natures Wrath, but close 
).
With two Sentinels I'd suggest this:
Legolas w/ Elf Bow and Armor
Thranduil
2x WE Sentinels
9x WE w/ Bow
8x WE with Spear
12x WE with Elf Blade and TD
If you want a little more models, you can drop one Sentinel, add another WE with bow (same shots) and two with Spear. Same points, 2 extra models.
Since my Spear models are supporting fights about 50% of the time, I find that giving them TDs is sometimes a waste of points (another model has already engaged the target). But this is not a hard/fast rule for me and I did very well at GD a couple years back with a force that had about half of my Spears also using TDs.
Sorry, you're right.