I'm afraid that I don't know of any indie developer diaries that describe their progress from the very beginning and have completed a successful game.
As for which game engine I personally would choose, it would be the Torque Game Engine (TGE), and in fact I am currently learning how to use it to create a CRPG. Your mileage may vary, however, depending upon your particular needs.
The Torque Shader Engine (TSE) is not yet completed, although an "Early Adopter" license is available for existing TGE license owners. Both TGE and TSE already include network support, so I'm not sure why you suggested adding code from Tribes 2 (which is older).
If you would like to see an example of a CRPG project being developed using TGE, take a look at "The Chronicles of Ny" from ClownKeep. It looks like they are making good progress.
If you do decide to use TGE, I would suggest buying 3D Game Programming All In One by Kenneth Finney ($30 to $50), as it walks you through the process of creating a game using TGE, and includes all the software you need to do so (some of which requires a licensing or registration fee for long term use).
If it suits your needs, you can then get a TGE "Indie" license ($100), and then a TSE license (TGE license + $150) shortly after that.
You will also need a 3D modelling program such as Milkshape ($25) or Blender (free), an image editing/creation program such as Paint Shop Pro ($120) or the GIMP (free), a code editor (prices vary) and a C++ compiler (prices vary wildly).
I think I've spent about $500 so far.