If the rear der is a short cage it prob won't take a bailout gear larger than 30T.
While you can use that Deore rear der a 7 speed can be found cheaper. You may want to upgrade, just sayin'.
8 speed stuff is real cheap on ebay, if you want to consider that route.
I think you've got a good idea going. What I'm not certain about is what you need.
Would a 30T bailout with a compact crank be enough?
If it's not, it's not a big deal. I use really low gearing because I tour.
Btw, Nashbar sometimes has good prices on stuff.
http://www.nashbar.com/profile.cfm?c...A%20Freewheels