WTF are you talking about? The dropouts on these bikes are very much horizontal. There is planty of room for wheel adjustment. I've owned a handful of vintage Treks and they are some of the nicest, best riding bikes out there, with build quality, finish, and details rivaling some very much more expensive frames. Deffinetly take it, but if you are going to convert it don't hack anything and save all the original bits. And I'm not just saying that to be grouchy, but vintage Treks have a cult following and are going up in value. The 560 was Double butted Renyolds 531 steel, which was one of the best tubesets made.

here is the bike in a 1986 brochure on vintage-trek.com:

http://vintage-trek.com/images/trek/86TrekCatalog.pdf

If you decide you don't want to convert it, if you were to just get it to clean up and resell you could afford a bikesdirect bike like a kilo tt or something from what I have seen as far as ebay prices.