I like the idea of an external overflow, and in your application 1/2" is way more than enough. If your overflow is 40"x8"x8" the actual water in the overflow is really only going to be about 39"x7.5"x6" (figuring the overflow will not be filled all the way up) that's only 7.6 Gal that's only about 68 lb. As for flow you can go with longer teeth to achieve the flow rate you want. External is the way to go. Good luck. On a side note who did you get quotes form? If you don't want to answer here, please IM me.
Thanks