In answer to your question...yes you can cut wood on a 3 axis mill. Unfortunately you probably won't have the speed to make a full depth of cut in one pass and you'll need to do some sanding to get a good finish. Most mills were meant for shallow cuts. The bigget problem is the time it will take you...turning a hand crank all day on a mill can be very tiring. You can buy a drive motor for the table but that adds to the cost.
Having looked at your product I would look at a Multi-router made by JDS in SC. It's in the same price range and would certainly outlast the Grizzly mills in a production operation.
http://www.jdstools.com/index.asp?Pa...on=Custom&ID=5
With a custom template and a fixture (or two) you could cut all you blocks without relocating the work piece. Using a depth stop you could adjust the final depth of cut and make a few light passes in just a few seconds. With some practice you could get a finish that required no sanding.
As usual, I have no interest in JDS just think it's a good product.
I like your product..pretty interesting.