Rather than start a new thread....

I'm helping a friend out with a Peugeot conversion and had a question (or two). I am trying to use as many of the existing parts on the frame. I've converted an old road bike before so have some experience with this.

Rear spacing is 125 mm.

1) I'm thinking some of the decently priced hubs will fit the frame...something like a Formula hub?

2) Chainline. I was hoping to use the existing BB and crankset. The inner chainring is too small but the outer should do. Something like 52/39. I was hoping to put the outer ring on the inside of the crank spider. Anyone done this? Did you have to monkey with the chainline and washers on the rear hub or the BB spindle length? I'd rather not start playing with the BB for reasons noted above in this thread.