IIWM, I'd thread on a nice, new Shimano 11-28 freewheel, link up a PC-58 chain, and ride on. I think you'll be surprised in a pleasant way.
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You know it's going to be a good day when the stem and seatpost come right out.
(looking for a picture and not seeing it? Thank the Photobucket fiasco.PM me and I'll link it up.)