1) How are you arriving at that estimate of your market value? Is it tied to your previous experiences in Europe? My understanding of market rates in the Valley is that if you can solo-prototype hardware your market rate is probably substantially north of that. (If you put a gun to my head and said "Pick a number!" I'd say "Oh please don't shoot 140k!")

2) The options you receive are not directly comparable to stock of public companies in terms of variance of returns. +/- 90% of options in startups will be valueless.

3) You ask what is acceptable. Anything which you and they agree on is acceptable. As your peer who wants to see you get the best deal possible, I would strongly suggest negotiating primarily for hard currency and treating the equity like the lottery ticket that it is.

4) It is not the customary practice of Silicon Valley firms to award equity for temporary (2 month) positions. A company doing that is signaling bad things about its likelihood for future success. Silicon Valley firms which need specialized contract work done for them raise money and then pay market rates for it. (n.b. Market rates are probably at $10k+ per week. Yes, that's a much larger number than the salary we discussed earlier. Ask if you don't understand why that would be true.)