Really hard to say without actually seeing it, BUT since you are on a slim budget, I would use a 'big wheel'* and some 40 grit to grind off the paint and get into the figerglass. More or less you would be grinding off the paint and shaping the 1/4 at the same time.
once you get the paint off and have the bondo/fiberglass exposes, I would start really star working on making it straight again. You will probably need to recoat the complete 1/4 panel and working on that gap between the door and the 1/4.
This will save you alot of grief if you completely took everything off.
Of course, the best way would be to replace the 1/4,, but this will be quite costly.
One tip that might come in handy is using a bondo 'cheese grater'. Get one of these when you get your bondo. After you coat the 1/4 with bondo, and right before the bondo is hard (usually about 5 minutes), you can use the cheese grater to really cut into the bondo and start shaping the 1/4. After you do that, use a big block (about 8" long), and shape it even further with 40 grit. The recoat with bondo, start with 40, then switch to 80 grit only when the panel is straight. Use the 40 grit to make the panel straight
Any thick spots that you would need to apply with bondo, just use Dura-glass. This is thicker than bondo and holds well.
*The big-wheel mentioned could be a buffer converted to a disc sander. You will need an 8" pad and probably about 10 sheets of 40 and 10 sheets of 80 8" paper (you can also use these sheets to hand block with in the hand sand step mentioned above). Be sure and use an electric buffer/sander. Any air sander for this project will really run your air compressor down.
Hope this helps!
