I'll give option no. 3 which is to buy a used vintage mtb with a rigid fork for commuting. Seattle is an expensive market but old used mtbs tend not to be expensive when compared to road bikes. You may find this cheaper than making the changes on your mountain bike and you'll end up with a heck of a nice old bike.

Like this on Seattle CL for $100: http://seattle.craigslist.org/see/bik/4169596029.html

I have no idea if this is your size but you get the idea.

I love repurposing old mtbs as commuters; this is mine (I just fixed it up the other day). My commute is shorter than yours but it has some rough roads and a bit of climbing (not a lot):