The DAO has over $2M of non-SL funds available. Some ETH can be sold if needed. I'm not saying that to mean that you should approve this proposal, I'm just pointing out that should it be approved, the DAO has more than enough available for it.
As for the timeline, in my experience it all depends on the lead developer. There are some developers who make projects go on and on forever and there are some who know how to get things done and often surprise you by how quickly they do things. I have the latter sort of developer already picked out to lead this project and I plan to try to get it done with or without the help of the DAO (this proposal wasn't even my idea).
I agree and welcome your plan that you describe on the second paragraph. It makes sense.
ETH is a bluechip. I hope we can hold on to it at least for the exchange listing, if that ever materializes. For a 'salary paying' type of funding if we have to sell our bluechip holding that will be unfortunate.