You should probably just use a FC SAN; if you have FC Storage already, you can grab an FC Switch and FC HBAs for the host servers; that will be enough to get a simple FC SAN going.
You can use a server to act as a FC-iSCSI gateway; software like Starwind or SanMelody run on Windows; or most Linux distros come with iSCSI Target software.
Handling the SAN IO will depend on whether it's IOps or MBps you're looking for. More IOps requires more CPU usage to process each; both require as much cache and the fastest buses you can find.
GigE is just as fast as FC; but there's more overhead with GigE usually. iSCSI runs on TCP/IP and that adds a lot of overhead. The Ethernet frame is very comparable to the FC frame however; so technologies like ATAoE and HyperSCSI can keep up, with the caveat that a single 4Gbps FC can do a single stream at that speed, and 4 GigE would need 4 connections to saturate the fabric (theoretically; real life is always a little worse).
So you talk about SATA and SAS drives... do you have a FC to SAS controller that you're planning on plugging into a FC-iSCSI Gateway Server, that's then relayed to the Host servers?? That's a lot of overhead and will pretty much kill performance.
If you want to use SAS hardware you can create a SAS SAN cheaper yet (and no FC or iSCSI); drives plug into it, SAS HBA on the servers, and the SAN chops the drives into "LUNs". Products like the HP MSA2000sa will do this. This is more limited than FC or iSCSI; but for simple environments is very cost effective.
You'll want to telnet/ssh into the switch, and use the "configupload" command. The switch will then need to be supplied the IP/hostname to upload to, the username and password, and the method of transport. FTP and RSH are both supported in most switches.
Best Answer
Yes, it's very possible - I even did it once, only once however - it's all documented in RFC 4171 and most if not all HBA manufacturers support it, though obviously not as well as they do 'normal' FC.
By the way I did it with Emulex 1105's on RHEL 5.3x64 and Cisco MDS9509's if that helps.