Do you have a picture of the wheels/brakes set up on the bike right now? That would help us determine if the wheels are indeed steel (some deranged person must have installed them prior to your ownership), if your brakes are set up as ideally as possible, and what kind of clearances we're working with. I have thought about and tried the canti-to-V brake conversion on a few touring bikes, and it comes down to whether or not the canti posts are wide enough apart (80-85mm ideally) and low enough (short distance from them to the dropouts) to facilitate brake type flexibility.

I'm currently yelling happily from the rooftops about Tektro CR720 canti brakes on my 1990 touring Cannondale. Canti posts are 80-83mm apart, and measure 290mm from the dropout/wheel axle to the center of the post front and rear. The 720s just fit, but V-brakes certainly do. What was nice about the 720s is that they look great, are immensely strong, and with Kool Stops, stop with as much authority (in wet or dry) as the best dual pivot side pull calipers that I've ridden (on my other bikes). Oh, and they DON"T SQUEAL! Seattle is very hilly, so if it passes the test here, it'll pass anywhere else.

Your canti brakes should easily accommodate going from 27" to 700C. The stiffer rim construction (most 27" wheels are "single wall" vs. "dual wall" for 700C/newer wheels) will help, and if you can find 700C rims that have machined brake tracks (small grooves), that helps brakes bite even better.

As per usual, proper setup, new/smooth and easy functioning cable action (good cables and housings), proper lever setup/positioning, and a good brake lever are a must to get good performance. A picture and report of that would also help us to get the whole picture of what's going on. You have a good bike, let's get it going properly.