If you live in a rural community, you may have friends who have good well water.
My wife occasionally buys bulk wheett for bread, going to try home malting.
I have kept liquid yeast strains alive, but eventually just went to dry yeists. That said, dry yeast is not as cheap as it used to be.
Once upon a time I was trying to break under $2/gallon. Last 2 batches (I have not brewed for forever), were closer to $10. From the LBS ( "local" about 100 miles away) all grain kits are not much cheaper than extract.
$10 per batch or per 1 Gallon?
$2 per gallon is crazy!!
Maybe for some low ABV, 3-4% beer without much hops, then I can see it.
Grain is about $1 per lb, maybe 0.80$ per lb if buying in bulk. With hops it is easy to get to $1 per oz if buying in bulk, but for specific hops perhaps even as low as $0.50 per oz.
There may be some light beer recipes - like american lager maybe? - that (for 5 Gallon batch) require only maybe 8-9 lbs of grain - assuming very good mashing efficiency, and maybe an ounce or even slightly less of hops.
With bulk purchasing this could be about $7 in grain bill and less than $1 in hops. Yeast can be reused and get well below $1 per batch. If not using RO water, just tap water, and cheap propane, you can probably get under $10 for 5 Gallon batch.
For more "regular" beers it may be more difficult. For IPAs the hop bill is a problem (I guess growing your own hops can reduce the cost to zero, depending on how you look at it). For stronger ABV beers, I usually expect 13-15 lbs of grain, including specialty grains. My LHBS charges only 99 cent per 1 lb of US 2-row, which I never realized is pretty low and close to what one could get from bulk purchases. Still, with specialty grains the grains typically end up costing $15, up to $20 per batch. I use $1 per oz of hops from my bulk purchases (some less popular hop specialties cost me less, but I do need Amarillo's, Centennials, Cascades, Chinooks, Styrian Goldings, etc. - so average is about $1 per oz). So for standard recipe that may call for 2-4 oz of hops, thats another $2-4. My water is pretty good already but I do purchase RO water to cut it in half on occasion - I fill Glacier water for 25 cents a gallon, so thats about $1.25 per batch (need 5G of RO water plus ~5G of regular tap water for 5G batch). Propane cost is where I could reduce it a bit. I am guess it cost me $3 or so per batch with my burner. But depends on how long the boil is.
So typical cost per average batch is probably $25 per 5G batch, or $5 per gallon. Then there is starsan, electric bill (fermentation chamber and keeper), water bill, CO2 tank refill, yeast nutrients, whirlflock, gelatin, DME for starters, termcap, gypsum etc. Real cost is probably at least $30-35 per batch, and that doesn't include equipment amortization rate for fermenters, kegs, keepers etc. - which get cheaper the more you brew of course, since those are not recurring costs.
I estimate that I spent about $2,000 on equipment, but I also brewed about 200 Gallons of beer over the past year, so that's $10 per gallon. At the more rapid rate I brew now (and using 10G batches), and assuming I don't need much equipment anymore (ha!) except for minor replacement of worn out or broken stuff - it could be down to $5 per gallon in equipment cost by the end of the year. Still, its a hidden cost that we all forget. And then there is your own time!
Having said that, it's a hobby, and relatively inexpensive at that! AND you get fantastic beer out of it.
Come on back Medic and help us understand why the hops for your 1.050 pale ale set you back $4/oz and who is selling the $1.50/gallon RO water. 
