It won't help you, but I started down this same path -- but I realized that I was about to throw too much money into a 25 year old bike and stopped after new tires. I had a 1987 Diamondback Ascent EX -- Chrome Molly double butted and no suspension. It had big MTB tires and really wasn't good for the road. So, I had a set of Bontrager rims I wasn't using and so I threw some 26 by 1.5 street tires on there. WoW, what a difference. So I started making all sorts of plans... just like you. And then I realized. I'd throw all this money into this old bike and when I was done, I'd still want a "new" hybrid bike. So, I stopped after adding the new tires and bought a Trek FX.

I still think I could have made a cool bike out of the Diamondback -- and I may do it some day.