I read through this post a few days ago and I love what you're trying to do. Here's a much cheaper and crazier idea. Would require a basic understanding of electronics, but it will work and would run somewhere in the range of $300-$500 less hoses and connectors.
Use a high-end RC servo to control a standard directional hydraulic valve. If you get a small 2-way valve that has the spring centering mechanism mounted externally (under a cup), you can remove the centering springs and greatly reduce the required control force. Fabricate a connector to hook the servo to the valve spool and obtain a suitable driver circuit to go between your control and the servo. Your control switch should be spring centered, so that will drive the valve back to center when you release the switch.
Futaba's biggest servo produces 425 oz-in of torque. With a one inch arm on the output shaft, that's a push pull force of 26.5 lbs. These servos use pulse width modulated signal for position command and use a separate wire for powering the servo. This means your control signal can be extremely low current. High-end servos for quarter-scale models are all metal constructed with metal gears and ball bearings and are highly reliable. These are used to fly aircraft that cost as much as some of our tractors. They would require a voltage drop to 6 volts for power though. Here's a link to Futaba's largest servo.
Futaba Servo Someone else may make a bigger one. These run in the neighborhood of $140.
Here's some info on how RC servos work.
http://www.futaba-rc.com/servos/digitalservos.pdf
You're planning to use an analog proportional thumb operated switch mounted in your joystick grip. I was thinking about a thumb operated hat to get control of two functions with one finger. Something like this small joystick hat for replacing Playstation joysticks on e-bay.
Analog Controller Stick Joystick For SONY PSP 1000 Fat - eBay (item 170295562953 end time Feb-18-09 01:00:11 PST) If I did this (and I'm thinking about experimenting with it), I'd look for a more industrial grade hat.
There are PWM modules similar to the one you showed earlier that can be used to control these servos from an analog switch/joystick.
As I've looked up these components, can't help wondering why manufacturers don't use a similar (although purpose built) method. It would be much cheaper and would offer greater flexibility of design. There must be a good reason.