Classic & Vintage - MB-2 score; decal damage advice

I recently picked up a 1992 MB-2 frameset; it's in excellent mechanical condition and I'm really looking forward to building it up. Unfortunately, it's had a bit of a hard life and has some cosmetic problems:
http://farm7.static.flickr.com/6176/6171052683_0785541467_z.jpg

The biggest issue is extensive damage to the downtube decals, which are under the clearcoat:
http://farm7.static.flickr.com/6170/6171052217_0ba0d9dfaf_z.jpg

I'd ideally like to remove these damaged decals while preserving the paint as much as possible...

I'm presently thinking "remove them carefully with a scalpel, polish out the color coat in the exposed area, then airbrush clear over it" which seems kinda likely to fail.

Any suggestions or experience?

Personally I would have left them alone. it stinks that it is scratched so bad but after touching up an paint with a close nailpolish I may have just clearcoated the (again with clear nailpolish) decal edges. trying to surgically remove the rest of that big decal may cause long term issues for the whole frame. now instead of having a small area exposed to the elements you have a much larger area.

The 2 bridgestones that I have owned have decals that easily flake off. Has anyone else noticed this?

Personally I would have left them alone.

To clarify, I haven't done anything yet besides wash the grime off. This is as-found.

The 2 bridgestones that I have owned have decals that easily flake off. Has anyone else noticed this?


Yes.

http://farm5.static.flickr.com/4076/4792848618_63f6596827_b.jpg
https://lh4.googleusercontent.com/-0Zk0vpWXohc/Tl2fkIE678I/AAAAAAAAA5s/R3s2P3EM2lc/s800/IMG_9217.JPG

All done with the first build-up of this bike. After removing the fingernail polish, I got some enamel from the model shop to go back over all the gouges to prevent rust. It matches the hue moderately well, but is not metal-flake. Oh, well.

Deore XT derailleurs, 34/50 chainrings on an LX triple crankset, really narrow BB spindle to fix the chainline as a double. Sora STI levers are lighter than I expected, probably because of all the plastic in there. They're shifting fine now, we'll see how they hold up. I love the look of the Tektro cyclocross brake on the front, but am underwhelmed by the stopping power, even with Kool-Stops.

7-speed cassette wheels off the parts bike -- they've got some issues but are good enough for now. Pasela non-TG 26x1.5" tires are cushier than my Challenge Parigi-Roubaix and only feel a little bit slower.

Enough talk, here's the pics:
http://farm8.staticflickr.com/7049/7057388057_6a2c4c7bae_b.jpg
http://farm8.staticflickr.com/7111/7057388115_7f081b4f0f_c.jpg

In the end, I just couldn't stand the look of those flaking decals.I carefully chipped them off with a razor blade, cleaned the exposed areas, and then shined them up with rubbing compound before waxing the frame. You can clearly see where they were, but it's not too bad. Bike might get repainted some day, if it turns into a forever-keeper.

Edit: Forgot to mention that I was worried it would handle like a veggie truck since it's "a mountain bike." In fact it handles like a nice road bike -- you think and it goes where you wanted. I almost want to write a "thank you" note to Grant Petersen.

looks great!

brand new tires are the best, aren't they?