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My major question: Does this deal seem shady or subpar in comparison
with the "normal" sort of contract extended to new artists?

It does not sound particularly bad in it's own right, but it may not be what
you are looking for.

With any deal, whether it is for a show, a manager, or a record deal, you
have to keep in mind where you are on the path. You said the band hasn't
even practiced yet, this tells me that you won't be able to get a good
recording together by the deadline, so the deal is not good for you right
now. Personally, I'd tell the label that "We don't feel we can give you a
good enough product yet, give us a few months to figure things out."

The first thing you need to do is practice your art, once the band meshes
and you have your style nailed, then do some basic recording, even if it's
just slapping your ipod into your mixer. These recordings aren't necessarily
for you to sell, they are for you to perfect your art. With luck you might
be ready to begin recording by December. At the same time you need to get
out and do gigs (record them, but more on that privately).

As for what a label usually does. Depending on the label they will more loan
you the money than pay for things, and depending on the label they are
somewhere between loan shark and Beelzebub, at least if the label is any
good. The lona is typically paid back strictly out of your share of the
proceeds until entirely finished. As to what their expenses are, among other
things they have:
CD shipping
Order taking
Logistics
Mastering
Publicity

Those are probably the biggest expenses, but they can find more.

The important things to remember with a label a
Will you get what you really want?
How much money will you make?
I seperate these because the money is what they pay you because you're
getting what you really want. Because of this you need to know how much they
will be spending on publicity for you, what their average sales per band
are, what the average band actually takes home, the ratio of management to
bands, and other things that will become important to you.

Now about Less Avenged. They appear to be what I will call a microlabel.
With a microlabel you have generally one guy who does management of the CD
sales, deals with contract negotiations for indie distribution, etc. The
1000 CDs is probably enough for that size label to sell for 3 years, so make
sure you maintain rights to sell them at your shows. With a microlabel the
quality of the label doesn't mean much because you won't be getting much
distribution regardless of quality. With most microlabels you don't want to
stick around for more than 1 CD because as your skills advance you'll want
to move to a more powerful label, unless Less Avenged moves up with you
which is a distinct possibility. The 60/40 split is not particularly good,
nor particularly bad for this level.

My recommendation is that you go label-free for a few months, see what level
your sales are at, see what you lack in your distribution chain. A
microlabel is a good choice for managing the headache of small-scale local
distribution, but don't take the medicine before the headache.
Joe