Its illegal. No matter WHAT way you try to slice it, its illegal. It is illegal because you are modifying copywrited content and using it in ways it was not ment to be used. Big fat "No" in terms of legality
Yes, its possible. No, you won't get it working. You're going to want a program with a decent WC3 exporter, like something that isn't GMax which screws the animations to hell and back
I'd tell you the name of one, but I'd rather have your illegal content stopped here. Its worse than the WoW models, mainly because Blizzard don't actually care about models from another one of their games being used in another game, but I bet both the creators of Half Life and Blizzard would care a lot to find models by one of them in another game