I don't know the current price of a Trafalgar module. Chris Cloke (Mr Sheerline) sells complete kits, and doesn't advertise the price of a separate module. However if you get in touch with Chris, I'm sure he'll be happy to talk business with you.
I was remiss in failing to mention that Ron Perrot is also building modules, these are based on twin piston tanks, fore and aft, and judging by the performance of his Alfa class and a friends Engel Typhoon equipped with two of these modules, they work exceedingly well.
As you come from an engineering background however, making a watertight cylinder will be a simpler task than for some, especially if you can access a lathe. Things that can befuddle a newcomer, like understanding o-ring sizing, tolerances etc. should be second nature assuming you have a mechanical engineering background.
A cylinder can be built from a variety of materials. Most people use either PVC, acrylic(PMMA), or lexan/polycarbonate. The latter two offer the possibility of a transparent enclosure, which looks very pretty and makes it a bit easier to spot leaks- sods law dicatates however that your boat will spring a leak once the top of the hull is placed on
Acrylic is widely available in many diameters(try 'clear plastic supplies' on ebay), it's much more brittle than the other two plastics, but is more rigid and easier to polish if it gets scuffed- OTW modules are constructed from acrylic. PVC can be purchased from builders merchants, or available for a five fingered discount in a nearby skip. The range of sizes available is a little more limited than acrylic, and although unfilled PVC is transparent, most PVC pipe is filled and opaque, it also quite a dense plastic, so a cylinder built with this will be a little heavier than one in acrylic. It is as tough as old boots, PVC can be dropped and manhandled, and will take much more abuse than acrylic, but it is softer so much easier to deform. Finally lexan/polycarbonate offers the advantage of a clear cylinder, and tougher still than PVC (it's used to make riot shields). Unfortunately it has the disadvantage of being far more expensive than acrylic and PVC, and rather difficult to source in the UK. However the afore mentioned clear plastic supplies have told me they can get it to order. It is cheaper and easier to purchase in flat sheet form, and I would recommend it for making endcaps. Being softer than acylic, Lexan scuffs easier and doesn't polish up so well. It's used extensively in the States, where it's cheaper and easier to purchase.
Other materials suitable are GRP tubing, thin walled metal tubing(run an external aerial) and even wood adequately sealed.
To seal a cylinder, o-rings are most popular, fitted to the end caps. Usually nitrile o-rings are used, but you also use silicone (more squishy), Viton or EPDM- the latter two are usually a bit harder than nitrile, and much more expensive, they should last an eternity though.
They can seal axially against the face of the tubing, or radially against the inside of the tubing. Either method works well if correctly executed; with the latter method you do need to ensure that the finish of the tubing is sufficiently accurate to effect a reliable seal- a lot of plastic tubing is very variable in this respect, so it's worthwhile inspecting the tubing carefully. If the tubing is wavy, you can skim out a bit of the tubing using a mandrel on a lathe, or turn an insert to fit inside the tubing from plastic or aluminium; depending on how you do this, it can reduce access to the full internal diameter of the cylinder. With axial compression you can machine the fit for the o-ring, or even get a decent surface by hand finishing. The disadvantage with this method, and it is very slight, is that you need retaining rods running inside or outside the cylinder to tension up the endcaps.
To seal the control rods and motor shaft you can also use o-rings, however some people prefer to use rubber bellows (Robbe make some nice bellows) for the control rods, and a thing called a simmerring for the motor shaft.
Okay, so what the heck is a simmerring you ask? It's Freudenberg/Simrits trade name for an oil seal. They make them in very small sizes- down to 3mm, and they're moulded in nitrile rubber. For the upholder a 4mm shaft seal would be appropriate. They are fitted with a small radial spring, so they can withstand internal pressure upto about 4-5psi, this is important if you're using a system that pressurises the dive chamber, e.g. Piston tanks. You can purchase these from Norbert Bruggen in one off quantities-http://www.modelluboot.de
Norbert also does lots of other goodies to help you build you own dive module, as well as some very interesting kits.
Simmerings in larger quantites are available from BSL Brammer (google that for your local BSL distributer). If you don't want to use a simmerring, you can use an o-ring with glanded fitting that allows you to compress the o-ring axially, to help it seal around the shaft (does that make sense?). This is a bit higher in friction than a simmerring, but o-rings are easier to source, cheaper to buy and easier to replace. Shaft speeds don't tend to be that high in subs, so the efficency penalty isn't as great as you might think.
Silicone o-rings have been popular for this type of shaft seal.
Finally I'd recommend you get this book-http://shop.traplet.com/product.aspx?c=294
Not an easy read for a beginner, and not the last word in every aspect, but if you adhere to most of what is printed in that book, you should end up with a well performing boat. Ignore the electronics chapter, it's now very dated (this book was first published over 15 years ago), but everything else applies as the physics of getting a model submarine under the water haven't changed, they have merely been refined.