I have a lot more in the shop than I probably really "need", but I not only work on my tractors/combines/equipment, but also my vehicles, and do a bit of "creating"..
Being you're from California where I know it's warm, I would invest in a fridge to keep refreshments cold (if you plan to spend much time in there) and a large fan.. I have a fan that was constructed from a discarded attic fan and some scrap sheet metal for about $50
Fire extinguisher, first aid kit, etc is a good idea.. I have a 5# ABC extinguisher, fire/first aid blanket, a small first aid kit, and usually have a 5 gallon pail of water handy (specially when welding/cutting)
I have a concrete floor in my shop, so I am able to use my 2 1/4 ton floor jack most of the time (one similar to what you'd see in a service station, not a puny "truck tool box unit), but I also have a 12 and 25 ton bottle jack, 3 sets of jack stands from 2 to 6 tons, and a monstrous pile of wood blocks.. I also have a hi-lift farm jack, but try not to use it alot, as I don't feel like it's super stable. A "cherry picker" comes in handy a lot too, however, I don't have one, I use either my loader tractor or skid steer, and I also have a small gantry crane that I use on occasion, and a chain fall.
I have a arc welder, torches, and a small wire feed welder, and I use them alot. I don't have a press, but that will be one of my next investments.
I have a pretty good sized compressor (60 gal, about 14 cfm) and it runs anything I have, except continuous sand-blasting.
I don't think equipment your size would call for 1" drive very often, I'd think you could get by with 3/4" drive. I don't think wrenches/sockets up to 3" would be needed very often either.. It's pretty rare I use anything much bigger than 1 1/2", even at work, where we have larger equipment.
Alot of my stuff was purchased second-hand. I've had pretty good luck at farm auctions and garage sales. If there were pawn shops near, I would take a minute to have a look there too. If you're going to look for used items, I suggest do some "window shopping" of new items first, so you have an idea what you would like to have, and an idea what things cost new.. I've seen used "harbor freight" quality items bring more than you could buy new harbor freight stuff. I try not to pay much more than half to 3/4 of what it'd cost me new for a similar quality (I'd not pay half of snap on price for used harbor freight stuff).. It's also a good idea to see if you can "try out" used air/power tools.
I also agree no need to buy everything at once, buy as needed (or as you find deals on things you think you will need).. Most of us didn't build our shops overnight.
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Today's Featured Article - Women and Tractors - Tractor Engine Repair - by Teri Burkholder. One of the great things about working on a tractor engine with your other half is that you know what he is thinking of at all times and can anticipate his every move and his next thought of what he will do. With Ben, anyway, I can tell! He'll be busy working and I�m handing him tools and he says, "give me that..." and I�ve already got it in his hand or "hand me that....."and I�ve got the portable light right where he needed it placed to see. "Run in the house and get me a...."as I open th
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