Frankenstuff, I know it's too late now but the next time you are cutting polycarbonate on your CNC I would recommend trying a different bit. Also I'm curious as to what your speed/feed was. Typically I wouldn't see that kind of melting without a really dull tool or way too low of a chipload. I have been running CNC machines in plastics shops since the mid 90's so I have a lot of experience cutting polycarb, acrylic, abs, etc... Anyhow, on polycarbonate we always use a 3/8" solid carbide single "O" flute cutter from Onsrud. Spindle speed around 16,000 feed rate around 250 IPM (F250.) is a good starting point with that tool. Also it's not a good idea to plunge straight into the material, we always get better results ramping in or helix in on a circular cut.
Neat project, looking forward to seeing the finished machine!