I've got a 36x24 and have just decided to do this. I've done it before in a previous house with a 40x20 shop.
One day I was trying to draw out some rough plans for some cabinets. For some kind of writing surface I was using my table saw in the middle of the shop with a bunch of junk piled on it because there was nowhere else to put it (yes even in a 40x20 shop). I couldn't see because, what little lighting was in there, came from T12 fluorescent fixtures. I felt like I was trapped in a bad rave

I cracked. Couldn't take it anymore. I abandoned all current projects, took everything off the walls, moved EVERYTHING to the center and literally started from scratch. Redid walls, added/moved electrical, drywall, mistint (cheap but high quality) paint from SW, painted the floor, T8 lighting, T.V. for instructional videos (this was before Youtube and wifi), etc. It went from a poorly lit, poorly organized/equipped storage area to a well lit, new construction-like house! Kind of like Denwood's place up there ^^(Awesome job btw!). I was then able to go in with a clean slate, layout all my stuff in order of functionality, frequency, etc. to suit my needs. I was really into woodworking back then and it made for a space I could do just about anything in. Don't get me wrong for a couple of months everything was in total chaos, but it paid off.
When you've got something like that you are A LOT less likely to:
1. EVER let it get unorganized or cluttered again.
2. Neglect using or cleaning it again.
3. See your wife again JK
I am currently planning this process again. Only this time I'm taking 1-2 years to weed out, add to and figure out what I wish I would have done or not done last time. My shop is currently very functional, but I'll never be completely satisfied until I had something like I had before.
Your budget should be plenty to do enough to get your sanity back. Trust me I know how you feel. And start a shop reno thread. I'm sure everyone would like to see the transformation!