Hi everyone. I've repainted the bike, cleaned and de-rusted all of the components and put it all back together. Very happy with how it turned out for my first ever rebuild. The drivetrain is definitely very worn and I need to adjust the brakes from squealing even though I changed the brake shoes.
My ultimate plan for this is to make into a gravel bike. I'm planning out gear swaps but I'm concerned I might not be able to fit a 1x11 on this for a couple of reasons.
I've been looking at SRAM Apex 1. Can I use the existing Shimano XTR v-brakes with a SRAM dropbar lever?
Would the front crankset be compatible with the square-tapered BB-UN91?
Can I fit an 11 spd cassette in the back? Not sure about the width of the rear dropouts. The wheels are Mavic 217 SUP rims with a rear DT Hugi hub.
If you really want a 1x11 gravel bike with drop bars, it would be better to just buy one.
There's a lot of gymnastics you have to go through to convert to drop bars for a bike of this vintage. If you still want to do it, go to old forum posts for drop bar mountain bike conversions. Instead of going that route, I think you could turn this bike into a pretty fun "flat bar gravel bike" if that appeals to you. Looks as if the rear hub/cassette is 9 speed, right? If so, then you should be able to go to 11 speed Shimano, e.g. 11-46 cassette on that hub. I am not up on my SRAM details but you won't be able to fit any cassettes with 10 tooth cogs on that hub, at least without changing the freehub body, which I would guess is not possible with that hub.
So if you decide to go to 1x11 Shimano for flat bars, that would be simple. New 11 speed cassette (will have to figure out spacers, maybe), SLX or XT 11 speed clutch derailleur, 11 speed chain (e.g. KMC), 11 speed SLX or XT shifter. I would try to keep the current XT 9 speed crankset. The middle ring doesn't look very worn to me from the photos, and it will work with an 11 speed chain. So to start just remove the outer and inner rings, the front derailleur, and the left shifter. Keep the middle ring. With a clutch derailleur you will very likely not have any issues with dropping the chain, even without adding a narrow-wide chainring. The gearing might be too low for riding roads, but if the drivetrain works otherwise, then you could buy a new larger chainring, e.g. 42 or 44, and maybe mount it in the middle position. Look up old posts on doing 3x to 1x conversions. If you need a new BB, I would look up what the requirement is for that current XT 9 speed crankset (read the part number from the crank: FC-Mxxx) and then just find a new Shimano square taper with the same spindle length. BB-UN91 might be the right one, I don't know, but any "symmetrical" Shimano sealed square taper BB with the right spindle length should work (just different quality levels).
Keeping it flat bar removes all of the issues with getting the shifter/brake levers/brake calipers to work with each other. You can add short bar ends for an additional hand position if you want.
I can't tell if those XTR shift/brake levers allow you to remove the shift pods. If not, then you could replace these with something like the Avid Speed Dial levers for linear pull brakes.
Maybe dump the bomber fork and get a rigid fork of appropriate axle-to-crown length. Some people like carbon forks for these things.
Good luck!