If I were you, I would rent a dingo with the toro soil cultivator. As long as the soil isn't too hard, it will till fairly deep along with burying stones at the bottom of the till zone.
That and it leaves a perfect seed bed behind with little to no raking.
Even though you are on a budget, it's a matter of what your time is worth, if you can minimize your time on this project, then it's more time to keep making money.
I would just seed and then water. The problem with straw, if it isn't steralized it will have weed seed in it. All you need to do is lightly water once in the morning and once at night. As soon as it starts to sprout, water a little heavier once in the morning. After it starts taking hold, cut back on the watering.
As for the seed blend, not sold on it. Not saying it doesn't work, but look around locally and see if there are any suppliers that recommend certain fescue varieties for your specific area. We have FS (Farmers Service) and a FS custom turf division. They special blend varieties for our specific area, so the results are about as good as you can get.
Oh, and the other thing I can recommend is that you broadcast your seed and then take a spring rake, turned upside down and run it across the top. This way you harrow in the seed just below the surface where you need it to be.
Also, what cultivar Fescue is in the Lesco Blend? Just curious, there is some new varieties out there that have a great spreading tendency and drought tolerance. The Titan cultivar comes to my mind first.