Tiber_Brew and others answered some of the specific questions, but if you need more help just let us know! I came in a bit late. I only do decoctions a few times a year now, but I have a good grasp on technique and the "hows and whys" because lagers were my favorite styles a while back.
The second starter size sounds far more reasonable for a lager, I hate to say! If you want to do a beer and then simply pitch on the cake, I think a simple 5 gallon cream ale recipe in the 1.043 range could give you a nice amount of yeast for this lager.
A couple of other tips- pitch cold and allow the wort to raise UP to fermentation temperatures. Pitch the yeast a few degrees cooler. For example, decant the spent wort on the yeast and then hold it at 40 degrees in the fridge, and when the wort is chilling take it out. Chill the wort to about 45 degrees, and pitch the yeast at a few degrees lower. Then set it in your lagering chamber and allow it to rise to 50 degrees for fermentation. This gives you a great lager, and often means that a diacetyl rest isn't even needed (although it won't hurt to do one).