Thanks for your thorough and well thought out reply. I am taking a soda break right now, but I'm building it up as we speak. I decided to go with some new 8spd Ultegra barcons and the Tektro RL340s. I just couldn't find anything used that was local or reasonably priced with shipping. It ended up a good $50 more expensive to go this route than with Microshift 7 spd integrated levers, but I decided to stick with the classic, tried-and-true method after all the feedback here.

I'm on a budget, so I didn't want to upgrade to V-brakes. I was going to switch out to modern bars with a quill-to-threadless adapter; but I realized I needed a spot to mount the lever for the drag brake. I would have to buy a bar mounted thumb lever, instead of going with a banded friction shifter out of my parts box. All in, I'm at about $300. So far I have the rear derailleur indexing good in the stand. As soon as I get the front brake set up, it's time for a shakedown cruise around the block.