I can take this idea and create a product for you from it. I specialise in taking ideas from concept through to production ready products.
You requirement is fairly simple. Wifi can be achieved using the roving networks WiFly module and a reasonable cost, the rest is stock Arduino stuff, 2 line LCD for local readout connected through I2C would allow you to have it on the end of a wire so that it could be sealed up better from the environment.
The ultrasonic range finders in the cited project are quite expensive and there are cheaper alternatives available.
I see that you are only wanting 1 sensor in the system that makes the server simpler.
As far as WIFI is concerned you can either set the WiFly unit into ad-hock or infrastructure mode. If you want to have the data available all over the WIFI infrastructure and potentially the LAN and internet this is the way to go. However if you are only interested in reading it locally then ad-hock is the better option as it will not require authentication onto the WIFI router.
Pleas take a look at my website WWW.EmbeddedAT.com
where you can see the sort of projects that I normally take on. If you think I am a good match for your requirement or simply want to talk through your options please drop me an email to Peter@EmbeddedAT.com
or a PM here on the forum.