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The link to the picture of your rusty frame doesn't work, at least for me.
I wouldn't worry too much. You don't have to deal with thru-axles, head tube sizes, BB standards etc. so it would be easy enough to find a replacement frame if this one is a duff. Your new group set and wheels etc. will transfer over no problem. Old MTBs aren't expensive either even for (what would have been) top-end stuff. Crack on I say!
Lucky for you that spoke is an elbow-out one (I think) which means it's far easier to thread through :)
PS. mini-Vs would work with drop bars, ought to clear a 1.75" tyre I think. But maybe check that.
frankenbike-
Ok no clue why that link isn't working, it's formatted properly. Can't seem to hotlink it without it adding a lfgss link in front of it which breaks it a bit. The copy pastable link is imgur.com/a/QjrUpqI
I don't think I wanna go mini-vs as I'm going to go mudguards too and will get bigger tyres once these are worn out.
boredom
Alright so I bought a dynamo front wheel, seemed like a good deal for €40, came with a second matching tyre and spare tube so I'm fairly happy. I know nothing about dynamos though and I've never replaced a spoke or trued a wheel, but I'm excited to learn!
Ryde Sputnik rim
Shimano DH-3N80 dynamo hub
36 Sapim Leader stainless steel spokes (1 spoke needs replacing)
Pasela Panaracer PT 26x1.75 tyre
I've also started to have a look about groupsets, and theres a 3x10 T6000 deore groupset (that I think is the right type front mech, never realised there was so many swing, clamp and pull options for front mechs) less brakes I could get for €150, or the best priced shimano groupsets I've found are bike-components.de, so I could still go 1x or 2x but they look like they'd be around €250+
Still not sure about maybe buying the rustless muddyfox frame in classifieds. Anyone any thoughts - both on the level of rust on mine and not having to swap everything over and sell spare parts?