Got a picture of the shim?

I would use these, but sadly, I don't know how they work.

Here are pics of the stem, shim and top cup of original headset. I think the shim was for the steerer to stem connection. Looks like I need a new 1" headset? Right?

As I wondered in post #5 . You can see the shim has the circular artifact from the stem's hollow section on it. So the steerer is a 1" spec. Still to be determined is whether the frame/head tube is also a 1" headset standard (the ID being about 30mm). Andy.

I hope to get the frame back from my LBS soon....although with snow coming and temps dropping, I guess there is no hurry to build this up. The frame is a Waterford 1200 series. I thought it was a good buy, but numerous issue have come up. It seems the former owner not only used the bike hard but must have left it in a wet basement for years

I would agree, you just need a normal 1" threadless headset. The shim was just to use a 1 1/8 stem on the 1" steerer.

One click search of Waterford 1200 brought up this link. 1999 Waterford 1200/Ultegra - BikePedia which says the 1999 version used a 1" headset, and by inference, fork with frame built around this spec. While not a guaranty of what the OP has a pretty easy thing to do.

One more example of too little info early on creating a lengthy thread. Andy.

+1 and the steerer clamp on the stem he pictured is indeed 1-1/8" (28.6 mm) based on the caliper reading.

https://www.youtube.com/watch?v=_7-6ALptqQQ

Google is your friend...