I have just completed a couple of similar projects, I converted to epub using calibre then did all the editing and formatting in Sigil.
Difficulties encountered were Calibre does not create 'perfect' code, in one case there were 10k+ lines of CSS code as every paragraph was given a separate ID and needed a CSS entry even though every entry was the same, other books were more 'normal.' Calibre also seems to scatter chapter breaks at random, and does not necessarily recognize Chapter headings, but you will be editing in any case so these are not major drawbacks.
Sigil is not, yet, an ideal editor due to things like the missing find / replace tools (being worked on though) and sometimes it is easy to get lost when switching between code view and book view. But the whole process was fairly painless apart from the one book with all the ID's, with that one I cut all the code from Sigil, pasted into OpenOffice for mass find / replace editing the cut / pasted back into Sigil. Afterwards I decided that just cut and paste the text may of been simpler.