Yes the line lens would work and shouldnt melt - if it does with those power levels the ar coating is seriously poo.
The 'time tunnel' is created by drawing an elipse - the easiest way to acheive it is to put a mirror (front surface type) on the end of a motor shaft perpendicular to the shaft. (so when you look at it from the side the mirror and shaft make a 'T' shape). The chances of you gluing a mirror perfectly sqaure is very slim but the slight angle that you achieve will make the circle - you dont want it to be perfect. The steeper the angle - the larger the circle until the mirror is at 45 degrees and the circle will go right round the room at the same level as the laser dot on the mirror.
A cheap way to achieve this is to pinch a motor from a dead CD drive - the motor that is used to open the tray is perfect and should have a plastic pulley or cog on the shaft. This helps you add your mirror as there is something to glue the mirror to. You can get away with Blu-tac as I did in my early experiments but be careful with motor speed as the mirror will fly off and you dont want a high speed glass projectile flying around the room!
Once you have this working, make a second motor 'scanner' and bounce the circle from motor 1 onto this mirror. Hey presto spiro effects. To vary the effects you need to independently control the motor speed, and its cool to be able to reverse one motor. Add a third one for more effects. The more bounces you have the less chance you have of catching all of the pattern on the next mirror as it gets progressivley large but it is possible with very shallow angle to get four motors in the chain that may not be practical if you ar edoing this for the first time. Anyhow you will have bags of fun with 2 motors
Rob
PS
NO we all dream of such
even for more than $200 would do!