What would be an obstacle to the development of a conscious "machine"? If we were able to develop a biological machine that was conscious, would we be creating "life" of some sort?

I see two major obstacles right now. The first is simply that we don't yet fully understand how the conscious machines we observe in nature (the brain), works. The second is that we do not yet have the technology to produce a machine of comperable complexity. If we were able to develop any sort of biological machine at all, we would be creating life. Consciousness doesn't even enter into it. Grass is alive, but it is not conscious.

How do you measure consciousness? Or How do you define consciousness?

Is a man in a coma who is determined to be a "Vegetable" really a vegetable? Is a living organism determined to be conscious when it meets standards or terms equal to that of Human interaction or is consciousness defined only to the human or animal organism?
Cells seem to communicate to each other via neuropeptides and receiver sites. Isn't this a form of consciousness?
http://www.livescience.com/health/050808_h...sciousness.html

Consciousness might be considered to be on a complexity and/or diversity scale. This would enable us to account for both the relatively simple responses to stimuli exhibited by single cells (including prokaryotic) and the complex behaviours as exemplified by humans.