Sod cutter or power rake
1. What does "replace our lawn" mean? Do you plan on reseeding or sodding?
2. There are several ways to install a new irrigation system without disturbing the existing lawn to any significant degree. Nothing in what you posted indicates any conflict. Whatever you do with irrigation is separate from the the new lawn with one caveat- It would be somewhat easier to dig a trench in bare soil, but that is way down the list of priorities here.
3. Do you have any experience with either a sod cutter or power rake? They really perform two different jobs.
4. What to do with 1000 ft of sod: That could be a concern. Is you lawn just real thin at the present, full of weeds, etc? Someone else might want your sod if it doesn't have many weeds or might could use it for fill in a low area and be willing to help get rid of it.
5. Almost forgot- if you are going to use a sod cutter, it would be a waste of time and money, not to mention environmental concerns to use a herbicide to kill what you are going to dig up.
If it's worth doing, it's worth doing right. If you wouldn't put your name on it, it ain't done right!