skyerocker posted this in another thread:
Here's what I did with the Peugeot UO-8 I picked up in Richmond for $30.00 last fall - very close to the one you have pictured, but in slightly nicer shape. Of course, a lot of that 'damage' is probably just dirt:
1. Take it apart to every last component. This includes headset, bottom bracket, remove freewheel, remove bearings from the hubs.
2. Start cleaning. Soap and water, then very fine rubbing compound, finally a good car polish on the frame. Chrome cleaner on all chromed steel parts (crankset, wheel rims, probably handlebars.
3. Aluminum polish on anything alloy (stem, brake levers and calipers, hubs).
4. Soak all bearings and bearing races in kerosene. Wipe clean. Clean wheel hub bearing races.
5. Chrome polish soaked rag and rub down each individual spoke (you haven't despoked the wheels, just clean them up as best you can).
6. Use a soft cleaner like Simple Green on the derailleur plastic. Don't forget to clean all the packed road crud off the derailleur jockey wheels.
6. Start reassembly by regreasing and reassembling wheel hubs. Do the same for the bottom bracket and headset.
7. At this point you start reassembling the rest of the bike. Once put together, readjust as necessary.
What you'll probably need to do the job. Tools: Cottered crank pin remover, freewheel tool, basic metric hand tools, hub cup wrenches (very thin open end metric wrenches), chain breaker, rotary wire wheel (preferably a bench mount). Parts: Assume new tyres, tubes, bar tape, possibly brake and shifter cables.
On any bike of that condition that I receive, I automatically budget $75-100.00 to put it back on the road: $30.00 for inexpensive 27x1-1/4 tyres, $10.00 for tubes, $5-10.00 for bar tape, have a spare $10-15.00 ready for cable replacement. Maybe $10.00 for a new chain (although that's seldom). Time budgeted (and I've got 30+ years as a bike mechanic): Four work night evenings. Usually, if I pick it up on a Sunday, I've got it torn down Monday night, spend Tuesday and Wednesday cleaning, Thursday reassembling.