I wouldn't get quite so discouraged - I think you have the foundation for an awesome car here. I know the engine setback will cause you problems but that is part of what is awesome. I set back the engine in my '67 Mustang 14" and Marty is right, I can barely fit a heater box in there, but if you must have AC you can always run a trunk unit. I know it can be a little discouraging with that frame sitting there rusting away and the parts half assembled. Personally I would teach yourself to weld to your satisfaction and get to work. I've built 3 cars from the ground up scratch built frame all self taught so if I can do it so can you. Don't let the TIG pussies intimidate you , just grab a MIG and practice a bit. The only factor that will really stop you is available free time. Hell, whatever, do it how you want but your setup is far from hopeless IMO, especially if you cut loose from some of the expectations that this site can create in all of our heads. 98% of the people who see the car will never know that the frame has some round tube that doesn't match the square tube for instance. I dont' see anything in your setup that looks like a showstopper to me, just make sure as you put it toghether with that big engine setbakc that you figure out your pedals early in the process.
I will admit though one thing that made my big engine setback possible was running the pipes down the rockers (and setting the driver back 10"), tough to make them fit in the trans tunnel and have any room for pedals.
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