+1 to George and Pat. The big advantage of having your own resaw setup is that you can use wood from unreliable sources, i.e. opportunistic hunting. There's good wood all over the place, but it takes an educated eye to spot it among the rest.
Gilmer sells instrument billets ready for resawing, but the price per set is still pretty high. I don't know of any tonewood suppliers in Michigan, but if there are any good ones, they'd probably be the same. There's some money to be saved in doing the resaw work, but more to be saved in finding the wood to resaw. I have the opposite problem as you, that I'm always running across good wood, but don't have the tools to process it  So my recommendation is to go out somewhere like that furniture place wbergman mentioned and buy one or two boards, slice them up, build a guitar, and start developing your eye for good guitar wood. When you need a reliable source, just buy already sawn sets from our forum sponsors. The rest of the time, keep your nose to the ground and you'll probably find more than you could ever use 
As for tonewood criteria, back/sides are the most forgiving part of the guitar. But still, the ideal is quartersawn for the full width, straight grain, no runout, no knots, no voids or drying checks. For necks, I make that a requirement. If possible, store your neck woods in a non-climate controlled area for a year, and check them with a straightedge in the summer and winter to see if they bend every time the humidity changes. With open pored woods, most of the time you can spot the bad ones by looking at the sides of the board, where you can see any curvature or runout in the grain as shown by the angle of the pores. Runout is ok as long as there's enough thickness to plane it out. Curvature is bad, because it usually means bending when the humidity changes. If the angle of the grain is different on either side, then it's probably from a spiral tree and will bend and twist when the humidity changes... very bad for necks.
You can also see runout on the face of open pored woods, by the length of the pores. High runout = lots of pinholes. Low runout = long lines.
For sides, knots can be trouble in bending. Particularly in quartersawn wood, because branches grow from the center of the tree outward, so with perfectly vertical grain, a knot will be a long line all the way across the board. Here's an example of what happens: http://www.luthiersforum.com/forum/viewtopic.php?f=10101&t=43767
Rift/flatsawn, small knots can usually be lived with. They'll usually crack, and the side may kink, but you can fill the little cracked knot with CA and sand it flat.
Knots in backs are less troublesome, but still usually avoided. Especially big ones, that could fall out and leave a hole. Unless you want to do some experimenting with natural soundports  Also, gluing braces to knots would make a weaker joint. And with a super flat shiny finish, the different moisture expansion of the knot will be visible as a little ripple most of the time.
The advantages of quartersawn wood are less total change in width for a given humidity change, and remaining flat. Flatsawn woods, will usually cup one way when dry, and the other way when wet (due to the changing angle of the grain lines across the width). With bookmatched backs, it results in an S shape across the width. Though once you've got them thinned and braced, they'll usually remain conformed to the dome of the braces and rim. Quartersawn woods will also cup when brought into a different humidity level than they're acclimated to and set on a flat surface so only one side can exchange moisture with the air, but they'll usually flatten back out once acclimated (not always, though, and this is why stickering is important, because it allows both sides to exchange moisture with the air, and having weight on top helps keep flatsawn woods from cupping as badly)
The big advantage of the "less total change in width" is indeed less cracks. And you can actually double your benefit by building in lower humidity as well. If a flatsawn guitar built at 40% RH doesn't poof up too badly in 70%, then a quartersawn guitar built in 30% won't either... and probably not even in 80%. So with quartersawn, you can extend your low range tolerance without losing high range tolerance.
For sides, flatsawn woods will try to cup when bending. I don't think it's usually much of a problem with heating blanket setups, but on a hot pipe, if you let it get started cupping, it just gets worse as you go. Best trick I've found is to press it flat against the pipe with a wood block to make sure the whole width of the side is in contact with the pipe and thus heated.
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