Another possibility is to put 26" wheels on a frame designed for 27" wheels, like I did on my Lambert; this lowers the BB and top tube considerably, depending on tire width of course. You would need to use hub brakes, which is no great hardship, and of course short cranks-- which I heartily recommend for everyone. My Lambert has 140's:
The problem with this approach, esp. if you have a small frame as the starting material is that the BB will drop so low that even with 165mm crank arms, any sort of pedal cage will likely scrape the pavement. For a small bike with 165mm cranks in 27 inch wheels, you need to go 162.5mm or even 160mm and good luck trying to locate those ones
Even 165mm are selling at a huge premium these days.