Ok, now my 2 cents.

1. I would search Ebay for a good condition frame of the same era that is the right size, and transfer the components. I wouldn't buy a brand new frame, since the components are 16yo, even though they are in great condition.

2. I would sell the bike to someone else, or give it to a loved one, and just go out and buy a differant bike with the right size frame to begin with.