Not that Steve PGN10 was suggesting converting a 700c bike to 26" but just to run some numbers, the conversion of a 700c bike to 650b involves a 19mm drop, (622-584)/2. That is doable with long reach caliper brakes or perhaps a brake bridge, a la Sheldon Brown. Conversion of a 700c to 26" involves a 31.5mm drop. Add 4mm for a 27" wheel to a 26" wheel - 35.5mm, (630-559)/2. Even if you found a caliper brake with a reach like that, you would be at a mechanical disadvantage compared to a shorter reach brake. This leaves you with a fugly brake bridge or disk brakes (or a coaster brake).

So, it would be a lot easier to just take a 26" bike and run 650b type tires on it. Conversion to a drop bar tourer is just a matter of finding the right frame and using drop handlebars, etc., whole thread on it here. The only problem with converting a mountain bike to a 650b-like tourer is the beefier and heavier frames on many vintage MTB bikes. With the right tires, though, this looks to me like an option versus a 650b bike.