IMO it would be a shame to replace that drivetrain with something modern. If you're some fixie kid looking for something to impress your friends, then I don't want anything to do with it.

But I kind of don't think you are, so like I said, just head to Ebay and be prepared to spend $75 or so for just the right thing. It really isn't all that tough to find what you're looking for. If al else fails, you can get ahold of Ted Ernst or Bill Ron (both in Southern California) who will know exactly what you need and send it to you directly - for a price.

WRT the wooden rims - I have put many miles on wooden rims without significant problem. Assuming yours haven't been attacked by termites or what have you, they actually are perfectly serviceable rims.