Yes this can be done, I've done it.  I owned a 68 Westie and bought 
a complete front axle assembly and the rear running gear including 
the transmission from a 72 bus.  I had planned to just swap out the 
front axles but the 72 axle would not fit.  The torsion tubes were 
larger and wouldn't fit the 68.  So I swapped the spindles, a 
"simple" bolt on procedure and presto front disc brakes.  Swapped 
the rear "carriers" which allowed the bigger rear brake shoes to be 
used and I could use the new bolt pattern on all fours.  There is 
an additional valve in the disc brake system whose nomenclature 
escapes me at the moment and you could adapt the power assist for 
the master cylinder but I didn't and had no problems.  Changing to 
discs improved braking a lot.

Phil
>Date:	Mon, 5 Feb 1996 12:49:41 -0600
>From:	jhalv@hooked.net
>Sender:	vanagon@lenti.med.umn.edu
>To:	Multiple recipients of list <vanagon@lenti.med.umn.edu>
>Subject:	Disc brakes on pre-'71 buses.
>
>	Ok, I've been wondering about this so  I'm just going to go 
ahead 
>and ask. Can disc brakes be retrofitted to '68 through '70 buses. 
>(Don't laugh so loud, I'm trying to concentrate)
>
>
>    John Halverson
>    jhalv@hooked.net
>
>    '68 Westy (In pieces) 
>    '71 Bus (Not yet but I'm still looking)