Late yesterday, we told you that once-popular link aggregation site Digg had been sold to Betaworks, the company behind bit.ly, news.me, and Chartbeat. Considering Digg’s massive decline over the past few years, news of it selling wasn’t too shocking. But the price was – a paltry $500,000.

To put that in perspective, Facebook just bought Instagram for $1 billion. Seriously, $500,000 is embarrassingly low.

But there may be more to the Digg story. Sources tell Tech Crunch that Digg’s sale price was actually closer to $16 million – a huge jump from the half a million we were told.

They say that Betaworks did pick up Digg’s remaining assets for somewhere between $500,000 and $725,000. But that’s only after two other players payed substantially more for other parts of the company.

Apparently, the Washington Post payed around $12 million for the Digg team. LinkedIn also joined the party, picking up a handful of Digg patents for around $4 million.

If correct, this is better news for Digg – but it’s still not great news. Once mighty and valued at nearly triple what they were reportedly bought for, it’s kind of sad to see Digg ripped apart and parted off like a beat up car. I guess it just shows the importance of striking while the iron is hot.