As far as employee vs sub-contractor, I have always hired itinerants as subs, and when working as an itinerant I was always hired as a sub. I would think that would be the case here -- owner hires a timber framing contractor to provide expertise, tooling, and labor on their project.
Yes that is what I would like to do. How does their living in a house on the property affect liability? What kind of insurance do I need as the GC/owner builder for subs on site, and for subs living in the house? Of course I will end up talking to a good lawyer before beginning, to make sure I am properly covered, but any knowledge now is helpful homework before I start paying a lawyer.
