If anything sell the Khar. If the Walther is a 22, sell that too. At the end of the day, get what you want as long as its in an effective standard and available caliber like 9, 40, 45. 9mm is fine for CC. .40 is the answer to the question that wasn't asked. It was developed by the FBI after switching to 10mm and a lot of the female agents having issue with the recoil. I have a couple .40s, but with today's bonded jacketed hollow points, it really leveled the field so go with the higher round count with the 9mm. I use Hornady Critical Duty or Winchester PDX1(FBI uses .40 PDX1)
As far as concealing a 226, the holster and clothing choice will make more of a difference than a smaller weapon. Even with open carry, holster choice is pretty critical. Concealed carry offers surprise, sometimes that's a decisive advantage. I like JM Custom kydex, raven concealment, and crossbreed holsters. They offer both concealed and open carry holsters and mag carriers.
Another thought for you - Can you afford an M&P or a Glock? They're cheap, have a lot of aftermarket support, and are used by tons of armed professionals. So my advise for that is rent as many firearms at the range you can, and test them out. If you liked the 1911 back in your service days, the M&P is more preferred among 1911 fans. It's also available with a safety so you can ride it like a 1911. If you absolutely need it to go bang every time, glock is a very reliable tool. M&P is not far behind. Both will run you about $500. Check budsgunshop.com and ableammo.com, they have good prices and free shipping on a lot of their stuff. Find a dealer that does transfers under $30 or will price match the online dealers.
I hope this helps. You can call the people at any of the companies I listed, they all have really decent websites and customer service.
I second this advice. I have the m&p compact, 40 cal, and love it. It conceals well, and the recoil is incredibly light. If you have a little extra cash, you can also buy a 9mm barrel and convert it. I did this for when i can’t get my 40 rounds. It shoots awesome either caliber and takes all ammo without any jams. Amazing gun.