Hi RebelLT
Drop bar conversions on old mountain bikes are AWESOME! See this thread for some inspiration:
http://www.bikeforums.net/showthread...ar-Conversions
One thing about conversions, they do require a bit of work to get everything working together. As you're experiencing, shifter placement is one of the trickier things that must be sorted out.
The diameter of road handlebars are 24.2mm, while mountain bike bars are 22.2mm. This means you can't always use the same shifters and brake levers on both bars. You will need to get road type brakes. Your bike is from the early 90s so I'm guessing it's got cantilever brakes. If so, most road levers will work fine. If you have v-brakes, you will need to get v-brake specific road levers. Tekro makes a pair.
As far as your shifter options, they are:
In general order of cheapest to most expensive
* Stem shifters
* Mounting downtube shifters
* Cheap thumb shifters with steel bands
* Bar end shifters
* Paul Thumbies
* Kelly Take-offs
* STI / Ergo / Brifters
You can use an old set of stem shifters from any old low end road bike. You may also be able to find clamp on downtube shifters with a band that fits your frame.
Many thumb shifters that have steel clamp bands can be installed on either MTB or road bars. You may need to get a longer bolt, but it's not hard to do. If you don't have any thumbies laying aroud, you can buy
Falcon thumb shifters brand new for about $10/pair, and they are advertised to fit on either mtb or road bars. Another option are the
Shimano A050 shifters which mount right next to the stem.
Bar end shifters are one of the most common solutions for drops. You can use friction or find an appropriate indexed one if you like. I use friction shifting on my bikes with 7 speeds in the rear without problems.
Paul Thumbies and
Kelly Take Offs allow you to mount downtube shifters on road bars. You can use friction or indexed DT levers with either. The Thumbies mount on the tops like thumb shifters, while the Take Offs mount near the brake levers.
Modern STI/Ergo/"Brifter" type road levers are also an option.
Good luck with your conversion and be sure to post some pics in that thread when you're done!