John:

I have been following your Bus talk on the list.  I am in a similar position
as you.  I just recently purchased a '56 7-door panel Bus... all bone stock.
As I am sort of moving right now I haven't been able to spend a lot of time
under the thing as you have been doing to yours.

Being in the same boat as you, but totally unqualified to give advice, I 
would go for Option 1.  Any car is worth more as a completely restored, all
stock 'mobile than a restored hot-rod one.  I'm sure you know this or you 
wouldn't be in your state of indecision.

When I was bringing my Bus home I had a chance for this old German mechanic
in this VW shop in Atascadero, CA to look at my heap.  He acknowledged that
the "jewel" was worth money because it was stock.  He made it a point to tell
me... almost in a fatherly sort of way, to keep it stock.

But the issue really comes down to drivability.  In my case the bus has the
original style '56 36HP engine and split-case transaxle.  To say that the
vehicle is slow would be a flagrant understatement.  In today's city/freeway
driving environment the old stock splitties are completely underpowered.

If you and I ever decide to sell our magic Busses then replacing the newer
engines (and transaxles) with the the stock ones would be a straight forward
job.  To me a car is only car if you use it for what it was made for... 
driving.  I know a gentleman who has many restored antiques in his garage
but that is all they will ever be... antiques.  When something just sits 
there looking pretting it is just another piece of furniture.

BTW:  I noticed "SUN" in your message ID, are you located in the Bay Area?
If you are maybe we could hook up and exchange help and contacts and just
plain shoot the poo-poo.

Dave Baker
dabaker@nas.nasa.gov