I have been thinking of doing the same thing with a Trek hybrid. The mountain bike conversion thread has a lot of nice bikes, but I don't need a frame that over built. The hybrids will take 700c wheels, which I have a lot more laying around than 26" mountain tires. The only limitation is the widest tires they will take is in the 700x45 range.

WNG had a black & red Crosscut that he put drops on, it turned out really nice.