Thanks for the comments jricc and mot. After some serious consideration, I decided to dig into the restoration. While maintaining the basic structure of the instrument, there were three areas that needed attention; 1). Restoring structural integrity of basic components; 2). Replacing damaged components (kerfing); and 3). Removing excess (cleats and bracing).
After cleaning, the structural integrity of the back needed to be restored in several areas by pushing epoxy into compromised areas with a small spatula and clamping.
The waist area of one side of the body cracked together with the kerfing requiring a re-shaping of the curve. An iron on low heat and a bit of water rolled over a coffee cup (with just the right dimensions) restored the arc. These laminated sides are very sensitive and laminated layers can pull apart with too much heat or moisture. Clamp and leave over night, and voila!
Removed the cleats from the bracing and shaved the excess down. These guitars were built with exaggerated bracing heights and thicknesses (to maintain the arches in the top and back) that killed the overall resonance of the guitar.
The more the work progressed, the more obvious it became - the kerfing needed to be replaced. To ensure the shape of the guitar is not compromised, the kerfing needed to be replaced one section at a time. Here's half (right side in the pic) of the back-side kerfing removed.
Because of the extremely fragile nature of the laminated sides, heat and water could not be used to remove the old kerfing. Had to use my trusty chisels to chip away at the old kerfing piece by piece. The new kerfing (maple) is wetted down for easy bending and clamped (but not glued) into place and left over night.
Once the new kerfing dries, it is glued into place (titebond) and clamped. Because the laminated sides are very flexible (but dangerously brittle), a white extension bar is placed to ensure accuracy of length for proper fit during final assenbly. Interestingly enough the width did not need any reinforcement bar.
As of today, the kerfing for the bottom of the guitar has been replaced. The surface will need to be planed and sanded to match the back, and the same process will be applied to the top. The smaller structural issues are being resolved as the project moves forward. Still have a long way to go, but this will be converted to an acoustic/electric using K&K Twin Spot (for archtop) sensor pick-ups. Should get really interesting! Thanks for letting me share. Cheers!