I had to do a similar thing – convert and resize images from custom fields.
There are a couple of plugins to convert custom field image to featured image:
Auto Featured Image
and Auto Post Thumbnails, which is the one I used.
There are also plugins for resizing images in your media library. I use AJAX Thumbnail Rebuild
If your original custom field images are not in your media library, you might need to use this first:
Add from Server
And this is a further great plugin for handling images throughout your site (especially for displaying different sizes):
Get the Image
