Yep I would go with the 3405. Great host. It is a tank. Now you can either go with Jay's option for the 1.5A microboost and have it all ready to go just throw in one of my diode modules and as a plus with this option you get to stick to a single 22600 battery without having to mod the tialcap.
Or you can go with the buck 1.8A driver and two of the 18350's I linked to but with those you will have to mod the tail cap to accommodate the longer 2X18350's and setup and sink the driver yourself.:beer:
EDIT
Looks like we were posting at the same time.
Looks like Jay's basic 3405 MXDL host/heatsink kit is $38 so that should put you under your budget after you get the buck driver, batteries and my module. You may go a bit over if you still need to get safety glasses but they are a must.:beer:
Also I found a US seller for the cheaper 18350's but he is about double that of DX.
2 TRUSTFIRE 18350 RECHARGEABLE BATTERY 1200mah 3.7v | eBay
They are about $13 delivered for the pair. Now the nicer AW IMR's are about $20 after shipping.
AW IMR 18350 700mAh LiMN Rechargeable Lithium Battery