I don't think you are being too conservative at all with the first post.
If I understand it correctly, you already live in a lively urban college town location.
If you were able to take the 157K cash on hand now, and a portion of the remainder of this year's salary your condo could be payed off. This would drastically lower your living expenses. It would take a lot of investment principle to come up with $1400/month in gains and dividends.
Does the $1400 include condo owner fees? Is it a building or a condo community? Utilities seem really high if it is a building. Then again, I heat with natural gas which costs far less than oil, and have a large SFR and never had a gas bill even half of $300. I don't think I even spend $600 a year on natural gas. If possible, assuming natural gas lines are available, and your condo association would even allow it, and IF, your oil furnace is solely for your unit a good investment would be replacing that oil furnace with natural gas. Big savings would be had there. If it is even possible.
Outside of academia, what types of employment activities are in the city you currently live in? What kinds of part time jobs would you look into?
Say you paid your mortgage off this year, and cut the remainder of the majority of fat from your budget such as cable, tivo, more beans and rice, etc, and were able to get your budget down to a $1500 floor (PLUS Health Insurance) would your life be satisfying? I don't have cable now and enjoy saving the money. However, if I weren't working there are going to be times where I just want to veg on the couch and watch some Threes Company re-runs. And not always doing fun free activities like the library, the park, bike rides, etc. Currently, I'm not home most of the time and not having cable doesn't bother me one bit. As far as the food budget, I'd rather work a few more years or whatever to make sure prior to retirement my "plan" does not rely on living on beans and rice two meals a day to make it work.
The above would leave you with approximately $500K in retirement accounts.
My concern is as PhDs you might get bored with not so stimulating part time work, or maybe not, but not really truly have enough money invested to fund activities to keep you stimulated.
However, maybe try it out for six months or so and see how you like it.
Personally, I'd be a little hesitant to at this moment. But obviously you two have different employable skills than I do and taking six months or a year of "sabbatical" might not be a red flag on a resume like it would be mine.