You love startups? Then get into them and try them out and see if it's a good fit, absolutely. Develop a prototype on your own? It really, really depends on what you want to build. You could probably pull off a simple web app in a reasonable amount of time. But, be wary of the excitement that gushes from all of the self-taught programmers out there; they have a tendency to kinda forget just how long they've been doing it once it becomes second-nature to them. Programming, systems administration, software engineering are all different disciplines with lots of breadth and depth and it can take a while just to get a handle on the basics.
Are you crazy to think you can compete with brilliant people? Hell no. I think most people have at least one talent that can make them one in 1,000. The trick is to figure out what your talent is, and then use it to compete. It might turn out that programming isn't actually your thing -- it takes a different mindset, a very fundamentally different way of thinking -- but there's something else you can do, technical or otherwise, that could make you shine in the startup scene. (I know a guy that hates programming anything from scratch, but he's a great maintenance programmer -- exactly the sort of thing that a lot of startup guys hate doing.)
You've got a nest egg that would make any ramen startup green with envy. So, make sure your expenses are minimal, relax, dive in to programming, try it out, talk to lots of people, meet some people, build some things. Don't get discouraged if you try one thing and it doesn't work; just try another.