Content management strategy -- need advice!

[siliconwriter at comcast.net]

I am at my wits' end. I work for a small start-up company which manufactures telecommunications equipment and OEMs it to customers. Our documents include hardware installation guides, software developer's kits, release notes, product briefs, technical notes and white papers. I am blessed with a set of engineers who write as well or better than many technical writers; I get a LOT of technical notes coming out of their group. These materials have a great deal of material in common.  Organizing this flood of information is proving to be more of a challenge than I can handle. Producing documents from it is even worse. Everyone wants their information in a different format.

I would like to modularize (is that a word?) the content of the technical notes, along with the drawings, images, and tables that accompany them. Then I would like to set up a 'cafeteria style' system whereby users (which are my guys, not outsiders) could pick and choose which sections go in their documents or websites. I've read a bunch of books about content management, but none of them provide any practical guidelines for how to go about setting up a CMS! How do I create a database? How do I create links between chunks of information? How fine a granularity is too fine? Do I want individual sentences segregated out? How do I pull together the final product? And most important, how do I do this in an environment where everyone uses Word and is not going to change to another system? (I can't even get these guys to use style sheets, let alone consider using OpenOffice or Framemaker.)

I would really appreciate some advice and examples from other folks who have solved these problems. I should point out that under no conceivable circumstances is my company going to pay more than $30K for a professional CMS. I have to pretty much sell and then implement this idea. I am the entire tech pubs department, so there's no one else to pick up any slack. I know that setting up a content management strategy will be massively labor-intensive, but I'm willing to do that if I only know what I'm doing! 

Thanks for any comments.

Sarah