Milton is a great choice because its open source,it has great support(the mailing list and the author of milton are very helpful).The main problem with the existing code is maintainability due to its large size. All the code is written in a single class and its pretty old based on an older tomcat version.
with milton we dont have to worry about maintenance as it handles all the bookkeeping .We only have to implement the interfaces for the functionality.milton is agnostic about the nature of the data.
From my understanding I created 4 classes SakaiFolderResource which implements the FolderResource(com.bradmcevoy.http.FolderResource) SakaiFileResource which implements the FileResource(com.bradmcevoy.http.FileResource) and SakaResourceFactoryImpl which implements the ResourceFactory(com.bradmcevoy.http.ResourceFactory) and a helper class SakaiDavHelper for code re-usability.
Finally the best place for ideas is the confluence page and I can always be reached at email@example.com for any query's