best is to start with http://www.youtube.com/watch?v=Ph3RaGa_IHQ hut and add on to it.

I'm not currently far away, I'm in the Chicago burbs.  I feel your pain, and I'm planning for moving to an even further northern climate down the road.

I like all of the principals that Mike Reynolds is trying to put forth, which is why I recommended buying the books, although I recognize that you may not be able to make use of everything he has, lock, stock, & barrel.  There is more than enough information in those books to save you a great deal of money, both now, and through the entire life of your new home, that make it well worth the purchase price.

You will have to adapt many of those principals to your specific circumstances, although as Mike Reynolds has done with the plumbing, if you install 3-way diverter valves in the right places, you are back to a conventional septic-based or sewer-based system that should pass inspection from all but the most stubbornly asinine building inspectors/code enforcers, and allow you to switch them to greywater re-use after the inspector leaves.  (I guess in theory, you could also pass inspection, and then retrofit, if the valves caused too much of a stir, but that would be breaking the law, which I can't advise you to do...).

If you are building within the city limits, it is probably best to get to know your local building inspector, and make friends with them, as they are almost always trying to look out for both your own good, and the good of the public, so if you can convince them that you share those goals, they will often tend toward leniency with your 'exotic' additions...

I'd be much more concerned with your solar exposure and/or your ability to put up a windmill, if you are that space constrained.

As far as the Earthship being labor intensive, yes, it is, at least at first, but the payoff is pretty huge for the rest of the life of the building, so it does balance out.  If you were to even time it right, with luck, I could come down and help pound tires with you too.  Rammed earth tires have some advantages over CEB, in that they are a more earthquake resilient building method, and they also don't require any sort of foundation, because their footprint already exceeds the area/force requirements that such a wall would need for a proper foundation.  They are also cheaply available.

Don't kid yourself on CEB, either, as it is still a labor intensive product too.  If you go back through some of the ancient OSE forum entries/web pages (if they even still exist?), you will find that during the development of the CEB press, they discovered that, and nearly destroyed many relationships over labor problems...  The production version can now be loaded by bucket loader/backhoe, but the final product still requires manual labor to collect and utilize.  The full 16 bricks /minute means a full and dedicated crew to grab & place them at that rate, or stack them (doing double labor) and place them later.  There is no free ride there.  They are also not going to be as resilient to earthquakes or other possible abuse, because they don't have that steel-belted outer shell, holding them together.  You have to determine which is right for your application.

As far as thermal mass vs. insulation, you will really need both for a carbon neutral home that doesn't require energy input to maintain a stable environment.  Straw bale construction also hasn't been approved for building 2-story construction if it is the load-bearing structure without exception design, and engineering stamp of approval, which is likely to be more expensive than it is worth.  You can do post & beam with strawbale infill, and go to multiple stories, but you may also run into some similar issues with using CEB for structure if your local building inspectors get queasy about it, because a lot is now riding heavily (no pun intended) on the quality and makeup or your soil, which is a big unknown at this point.  If I were a betting man, I'd say you're gonna need much more mass than what you've got planned, especially if you go with CEB...

The basic principal of an Earthship, is to utilize solar gain to passively heat thermal mass, and insulate that thermal mass well enough that it becomes an effective buffer for the living space.  You don't have to do it exactly the way that Mike Reynolds does it, but doing it differently, will likely make your costs go up and/or your efficiency go down.  That may be a tradeoff that you're willing to accept, for instance, if your utility bills were only $800/year for the life of your house, vs higher, although he aims for less than $100/year.

As far as using strawbale construction, because of their thickness, you would need a different design for your roof joists, so that you would have the space for them, but yes, you could do it (for a bit more than the generic Earthship design, but that is probably well worth the price).  You could also do strawbale outside of your CEB walls or rammed-earth tire walls too, but the important part is to inclose at least the same amount of mass inside, because it is your buffer.  You will have to repel water off of any earth berm on the outside of your thermal envelope, no matter how you make it, or your thermal performance will suffer.  (Google PAHS or passive annual heat storage for more info).

In short, you will need the mass on the inside, insulation outside of that, and a vapor barrier over the insulation, how ever you get there, and the proportion of mass that you will have will determine the temperature swings that your environment will have, whereas the insulation will determine how much it will cost you to keep your internal environment at a different temperature than the outside environment, as it will be the separator between the two.

Mike Reynolds has come up with a generic plan to integrate all of the systems that are essential for a home to be off-grid and still provide for the inhabitants, so it is hard to break them up without compromising some of them, if not all of them, if you're not careful.  If your site/land doesn't have enough solar exposure and/or wind power, you may already be doomed to a more conventional building, with a lifetime of utility bills, anyway, because it absolutely requires some substantial solar input for the design to work well.

Other tests with strawbale insulation buildings has shown that even over time, as long as you can a) start with properly dried bales (less than about 12% moisture), and b) allow a means for the bales to dry out, even built into a wall, they won't rot, they will just dry out if they get moisture in them.  That is why it is customary to use a sealing type of cement plaster on one side only, and a permeable type of plaster on the other side, so that the bale can dry out or in, depending upon your design.  You also don't want them sitting directly on any other type of material that will or can wick moisture for the same reasons.

To answer your 3rd question, it is also fairly common in masonry, to tie 2 walls together with an insulating core by embedding wire or lath ties in between the brick courses occasionally, so you could do something as simple a as using wire coat hangers that were bent to form a "T" or such in the first course of bricks as you were adding mortar, and just adding one every 3-5 feet, to make the wall a long-haired porcupine to the inside.  These wires sticking out could then be used to stick through the bales, and into mortar gaps in an exterior wall, but that really seems to be complicating the construction without any gain.  It will probably be a better performing and safer design, not to mention less labor to just do a double- or triple-wall CEB if you were going there, put your occasional wire ties toward the outside only, and then tie in the bales to those, & plaster the outer surface of the bales.  The CEB part would then be tied to itself partially with the wire, and also with mortar, and the bales would effectively become insulating 'siding' for that wall with an R value of 29 or so...

Hope this helps, and FWIW, I'm also going through multiple iterations in my own design phase of my new home too, so we may be able to collaborate further too, if you're interested.  I'm at least a few years away from actual building at this point, though.