Hi smokie,
Ironically, I just made some today and I followed what I've done in the past, 1 oz coffee (I've tried both and freshly ground is MUCH better than pre-ground) to 3 oz of water, which is slightly more diluted than the 2 to 5 ratio you suggest, so yours should be similar to mine in strength. You can boil water to make sure it's sterile and then let it cool before adding the coffee, or you can be lazy like me and just pour the coffee into a partially emptied bottle of spring water (since good quality spring water should be close to sterile). I've usually let it sit for a few hours at room temp (giving it a gentle shake occasionally wouldn't hurt) and then put in the fridge overnight. Next day I boil or starsan a stainless steel mesh filter and filter the extract through that. I don't recall exact numbers but I think about 60% of the water will stay in the grounds. For me, about 1.5 oz of extract is enough for 1 gal of beer, which would only be about half of the amount you will extract. So I would suggest doing a pilot batch as I mentioned above, in contrast to just adding all of the extract to the bottling bucket. Extra extract can be stored in the fridge and you can make excellent coffee with it by mixing 1 or 2 spoonfuls with hot water. However, cold brewed yields a lot fewer cups per lb of coffee than hot brewed so it's an expensive way to make your every day coffee (although some people do this).
I haven't experimented cocoa nibs yet (haven't had that many choc beers and the ones I've had haven't impressed me enough to bother with it). One thing I suggest (if you're the curious type) is to mix in the priming sugar very well (but gently) and bottle a few beers without coffee, then add the coffee extract, mix well and bottle the rest. This way you can compare the beer with and without the coffee.
P.S. It's a good thing you "liked" my post because for some reason my subscribe setting was off and otherwise i would have missed your question.