Hi,
I can totally understand doing whatever it takes at night so you can get some sleep. I think we have all done something we know we shouldn't because we are too tired to do the right thing!
You may not know this, but watching TV before sleeping actually affects sleep (negatively). I don't know all the "scientific data" about it, but I have read numerous articles that say that you should not allow your child to watch TV before they go to bed. The video may actually be preventing him from falling asleep! The sippy cup of milk is also not such a good idea because it is really bad for his teeth.
I think the only choice you have here is to break these habits cold turkey, which will not be fun and will also cause several sleepless nights for all of you. But in the end, it will be worth it. I don't want to sound preachy, but sleep is so important for little kids and lack of adequate sleep can cause so many problems that can continue into his school years.
My advice is prepare him ahead of time for a few days that on Monday or whatever day, you will be removing the TV from his room. Since he is two, you can at least talk to him about it and explain that it is not good for him to watch Elmo at night. Involve him in choosing an "Elmo wathcing" time during the day so he feels like his has some say in the matter and just make sure the TV time is during the day or early evening.
Then, when the day comes, follow through and take the TV out of his room. He will not like it, but there are plenty of things we do as parents that our kids don't like! Put him to sleep and be prepared for crying. I was never a big fan of letting babies "cry it out," but a two year old is old enough to understand the situation. When he cries, the first few times, go to his room and tell him from now on, he has to fall asleep without the TV, just like you talked about. Tell him you need to sleep and you will not keep coming in to the room. After doing this several times, just stop going in to him. This will be VERY difficult, but eventually, he will fall asleep and after (hopefully) a few nights of this, he will stop crying and asking for Elmo or you!
I would not take the TV away and the milk at the same time.
Once you have broken him of the TV habit, I would do the same with the milk. Let him drink his milk before he brushes his teeth and then explain that he can't have food or drink after he brushes his teeth.
I know all of this is easier said than done, but I too have learned the hard way that what is easiest to do at the moment, often makes things more difficult in the long run. If you can stay strong for a few weeks and break these habits, it will be worth it in the end!!
Good Luck!