I dont think anyone makes a bolt on CNC kit for this mill so you will have ot make the parts you need to do it. Look at the RF-45 builds in the Machine build tread section for idea's of how to do it & places to buy parts.
3D milling head, no you want find such a think. Well thats not exactly right but the ones that I know of that could work are major high dollar in price and not that accurate anyway. This doesnt mean you want be able to do 3D milling, because with right software you can ( I expect you where talking about 5 axis milling anyway).
Servo's - steppers, this is a question many people ask alot. ANymore either can be done with a stepper setup being cheaper, and a servo system being a little smoother and maybe a little more accurate. WIth steppers sizing the stepper right is key to having a system that will stay accurate. With servo's you can get by with smaller motors which help's in many ways, plus the system is much quiter.
ANymore I fell the DMM A/C servo kits are hard to beat. Price is very good, and performce & durability is even better. IMHO DC brushed servo's dont even compair to this system, and the DMM setup may even be cheaper.
I think you can convert you mill for around your budget ( very close anyway depending on ballscrews you buy), but CAD/CAM software,tooling and workholding will be another expeince you need to think about.
You can build the convertion parts you need on your manual mill, you will need a boring head to help with making end mount bearing holders, and maybe even ballscrew nut mounts.
When you buy ballscrews & nuts buy them with the machining already done. This means you will have to figure out the you mounting with your end bearings and motor mounts first so that you know what machining to get done. Places like HomeShopCNC & Keling come to mind for getting the ballscrews ordered with machining all ready done. ( unless you can a lathe you can use to machine them yourself).
Again you will find more info about the proccess by reading build threads on the forum. Any RF-45, IH clone, BF-46 build thread will teach you a ton about what your getting into. These build threads will mostly be in the "Benchtop Machines" section of the forum.
I would also plan for a forth axis. This will be beyound what it cost to convert the mill but it will make the parts you build much easier to achive. I think you could get by for a while with out it but it will take longer to build a part. Still by the time you get to where you are producing parts you will understand this need much better so it would be better to wait until you get to this point before worring about a forth axis ( just read and learn about it so yuo can plan it into your electronics cabinet build, plus software purchase choices.
Jess
GOD Bless, and prayers for all.