Q1: Should I bother to convert to SWM? ...
As was previously said, SWiM would cause a problem with your three Sony/Samsung legacy receivers, therefore a legacy WB616 (6x16) multi-switch is required as you will need room for 11 tuners in all. However, if you are willing to spend the money on a large WB616 which is usually expensive, you might consider purchasing a SWiM-16 for future conversion and for now simply attach the present WB68 in your diagram to its four legacy ports for now. Then make sure the two new SD receivers you wish to add on the first floor are "D12" models which are SWiM compatible.
... Q2: What additional equipment will I need to expand to 1st floor? e.g. OTA diplexer, Coax lines from WB68 to DVRs.
Depends upon what course you choose in question #1, though diplexing is not possible with a WB68, WB616 or a SWiM with WHDVR service. It is possible on a SWiM without WHDVR, but still not recommended.
... Q3: If I do it myself, can I get better deals on equipment outside of D* (i.e through 3rd party vendors)? Note that I'm a long time subscriber and D* *may* give me a better than advertised deal on rcvr hardware.
Thanks in advance!
As a long time customer, you will likely get a better deal on equipment through DIRECTV as an upgrade.
The problem is that for three new receivers DIRECTV will insist on a professional install and no longer carries the WB616.
For 11 tuners total they will want to install a SWiM-16 and swap out all three of your Sony/Samsung receivers for two R16s and a D12.
And if they go that far you may as well go for WHDVR service as well.
So my recommendation would be to purchase and install a SWiM-16 and connect the WB68 to the legacy ports for the second floor, and buy SWiM capable receivers for the first floor.