I'm not surprised. The problem is
not that your are trying to use 700c in place of 27" wheels... thats only a difference of 4 mm (1/6th of an inch). The issue is trying to mount a short reach brake - which even back then was designed for dedicated racing bikes which would have had very tight clearances for narrow, low profile tires. Even my own top-end Schwinn, a 1971 Paramount (the "Sport Touring" model, rather than the Racing model), was designed for 27" clincher tires and wider (therefore taller) 27" tires, and with even enough room above them for fenders.
I could not use most Campy brakes on my frameset, even with standard drop bolts and 27" wheels. The previous owner had tried to set it up this way, so I got the bike with excessively expensive Campy brakes along with some very expensive Campy drop bolts... which were basically just worthless for the bike even with 27" wheels.
Campy actually made two different brake caliper models, one had slightly longer arms allowing a reach of up to 52 mm, but most I've actually seen were the shorter arm style with a reach of only 47 mm - like most modern brakes. The Campy drop-bolts I have only give an additional 8 mm or so. Most any better quality Schwinn road bike in the 60s/70s would have used the premium quality Weinmann center-pull brakes which had a reach of up to either 61 or 75 mm depending on the particular caliper model... a considerable difference from that and the Campy calipers. The drop bolts do not offer enough additional length to bridge too great a gap.
Again, I'll use my bike as an example: _ Using the
longer (rarer) version Campy brakes, and adding a drop bolt, the front caliper would still be shorter than the 61 mm caliper reach needed for my current 27" wheels. The Campy caliper + drop bolt will simply not fit- even on the front... and, the rear brake requires considerably more reach than the front!
Not an expert on the subject, but I think the drop bolts were indeed intended to help switching wheel sizes... but on frames already designed with tighter wheel clearances. But, not to help change the frame design to accommodate it for use of the short brake calipers.
