I agree with finknottle. I think that when schools ask for 500 words, they're making an implicit statement about what they want you to tell them. A 500 word SOP isn't the place to demonstrate creativity or flaunt vocabulary. I had to go through this process when I submitted my applications in early December, so I have a couple of practical suggestions that helped me:
1) Take your 1000 word statements and go through every sentence. Ask yourself: can I say what I mean in this sentence with fewer words, even "smaller" words? Think Ernest Hemingway. We sometimes actually underestimate the power of succinct, straightforward prose. (Remember, it's not that what you originally wrote wouldn't impress an admissions committee, but that they want to know if you can get to the point. It's a type of writing that graduate programs will require once you're admitted, so they're having a look now.)
2) Read each sentence again, and then consider if you can collapse one into another. Instead of this: "I traveled to Chile and was inspired by their democracy. This experience shaped my decision to write my undergraduate thesis on the country's transition from military rule." (27) Try this: "Inspired by Chilean democracy, I composed my undergraduate thesis on its historic regime change." (14) Don't just delete periods and add conjuctions; play around with sentence composition and try fitting the meanings of entire sentences into dependent clauses.
3) Now that you've preserved as much of your original as possible, just expressed it differently, now's the time to do more heavy cutting. I absolutely agree with you that pulling random sentences out isn't helpful. But hopefully you've condensed some of that meaning you were afraid of cutting before this point. Now you need to give the big, critical eye to your, as finknottle pointed out, "personal" bits.The first thing to go should be your narratives of how you came to be interested in a certain topic, especially if it involves an anecdote. Try to fit that stuff into dependent clauses if you MUST keep in in. Try trimming out that fat (remember, fat is what makes things taste good, but committees reading 500 word statements want the straight-up protein) and seeing where you stand. Some other things that can go, if you have them: a) Any kind of "prose CV" where you talk about your awards, accomplishments, etc. out of context just to demonstrate your chops; b ) Whatever comes before your thesis statement in your intro paragraph (whatever comes before "I want to study ____ at _____ because _____" or its equivalent in your statement); c) Sentences that expand on the one or two that came before them, but offer extraneous information that gets away from your main point. Think of your statement like a tree. A thousand word statement can have some branches, even a few branches that have branches. But a 500 word statement needs to have a clearly-defined trunk (the argument of why they should admit you) and just a few short, thick branches. The idea is not to stray too far from the trunk with anything, even if it's well-written AND informative. Ask yourself if what you're saying helps you further your MAIN POINT, which is why they shouldn't throw out your application.
-->That said, make sure you DO keep your research interests, your prior research (but be straightforward! Try a one sentence summary of the work, and a one sentence summary of your findings), your career aims, and why you're a good fit for that particular school. Those should be the backbone of your statement, because they're what committees will match with their faculty and program.
4) When you've done all this, give the statement to someone that you trust who's a good editor. Ask for feedback, especially from academics who've been through this process themselves and/or served on admissions committees before.
I realize that was kind of long, but I know how hard it is to take what you think is a finished piece of work and have to almost go back to the drawing board because you have to be willing to chop whatever it takes. Hope this is helpful! You can do it!