Formatting Phone Numbers In SQL

Here's my problem: I have to clean up a SQL Server 2005 database with a large number of phone number records (several hundred thousand). The records are of varchar datatype and contain phone numbers in every format imaginable. In fact, many records have written notes regarding the phone numbers after the numbers themselves. What I need to do is format all of the phone numbers to this format:

###-###-####-

Basically I'm figuring I need to do the following:
1. Strip all non-numeric characters from the record
2. Remove the 1 from any records that have a leading 1 (in many cases the records contain stuff like 1-888-555-1234)
3. Remove any digits following the first 10 digits (they don't want to keep any extensions - the formatting is more important)
4. Add dashes after the first three digits, after the second three and at the end of the phone number

This seems like a rather complex problem to me, and honestly I don't even know where to begin. I can accomplish this rather easily in javascript or C#, but writing SQL to solve this is beyond me. I'd really appreciate any help you guys can provide. Thanks alot!