Originally Posted by Velo Mule

What? How did I miss that! Although the derailleurs and many other parts are Campangnolo, it has a Stronglight crankset. Nice.

Tires, you have little clearance for 1-1/4" tires. 1-1/8" would provide more clearance for sure. No doubt, the bike came with 700C wheels, I'm sure you are correct in that they were tubulars. So, 700C clinchers might be a better fit. It is only a 4mm difference from 27" 630mm to 700C at 622mm. If you also move the axle rearward, you could eek out a little more room.

Why do you think it had steel rims when you acquired it? Did someone want the tubular wheels for a Peugeot and swap wheels?

Are you willing to buy new wheels to get to 700C? If it were me, I'd be tempted to even though there is only a small return just so that I could feel like the bike is on the right size wheels.