I am in the process of building up my 1985 Cannondale ST400 that originally had 27" rims on it. The only problem I had was that the front brake was a tad short (I mean 1mm short) with the original pads to fully reach the rims. So I could either replace the brakes (Tektro makes some with a 55-73mm reach) or what I did was order some original Scott Mathauser brakes shoes and will use those instead with my campy brakes. As long as your brakes can reach I don't see a problem. A 700X35C tire should be about the same width as a 27 X 1 3/8.