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If it really is an ally bolt, then the drilling's going to be a piece of cake. Like a knife through soft butter if you have a good drill bit and a steady hand. Although go gently, you don't want to go through the bottom of the head and ruin the stem.

However, you might try the epoxy trick first.

I have taken one of those off in the past (it may be sitting in my loft still), so I probably have a tool for it, but unfortunately, I am in SW9, so not terribly helpful (unless you can get to KT1 during working hours).

You will find when you get this off that it is on a threaded hub rather than the more modern splined hub. This may mean that you can just stick a freewheel straight onto the thread and you are good to go (once you've sorted out your chainline).

Need to go up to the loft later, so will have a look to see if I still have that cassette (EDIT: before I get flamed, no, I do not mean cassette, I mean 5 speed freewheel) and see whether I can work out if it can be dismantled / spaced.

robadob

Great to hear you've made some good progress. Regarding paint stripping and repainting, I can thoroughly recommend Armourtex, who are based in Hackney. Incredible job in about 3 days - really pleased with it, and saved me all the effort - I have stripped and repainted a bike before and would never bother again - many times better result done professionally!

Crankset: I've gone for Eightinch 165mm. Currently sitting in UK customs... Think a 107 BB will give me a 42mm chainline (haven't bought BB yet until I can work out what the chainline on the rear will be...).

Hub: Actually bought a Halo Aerorage wheel, but am waiting for it to arrive - there's been no stock in the UK for months. Was originally going to build this bike on the cheap (Halo on special from Wiggle was the cheapest option for going fixed) using components that I have lying around, but I kinda got carried away, so now everything is new except the quill stem, the old frame (which now looks new :-) and a saddle which is unused and came off my wife's mountain bike 12 years ago!

robadob.

I am in the process of converting an old Peugeot, which seems to be of a similar era to yours (80s?). Nice thing about mine is that it has a high BB, so great for a fixie, although I see you are going single speed, so not such a benefit for you.

Some thoughts:

Bottom bracket:
i) Great article about BB removal on Sheldon Brown's website:
http://www.sheldonbrown.com/tooltips/bbcups.html
I reckon bench vice is probably the way to go, but you may want to take your frame to your LBS and get them to try to get it out.

ii) Big watch out with old Peugeots. They used to use French threaded BBs (70s and very early 80s I think) and it is harder to get replacement (cartridge) BBs for those, so if yours is French threaded, you may want to clean, regrease and keep your one. I am lucky - mine is late enough to be British threaded, so I can put in a new cartridge (handy, since I've lost all the old bits of the BB).

Stem:
By "strip the allen bolt", do you mean that you made the hole that you put the allen key into circular so allen key no longer works, or do you mean that the bolt has sheared off (snapped in two). If the former, you may need to get the head of the allen bolt drilled out of the stem (find a local machinist workshop to do this for you if you do not have the appropriate power tools). If the latter, you should be able to poke a long rod of appropriate diameter down the stem hole and wallop it with a hammer to release the stem locking thingumajig.

Seatpost:
Peugeot's of that era seem to have very narrow seat tubes. Mine is 24mm. Seatposts of this size are hard to come by. I ended up getting one from Decathlon (called L330 or something like that) - costs a tenner. Comes up slightly too narrow (23.4mm), so I created a shim for it with a very thin sheet of metal which worked a treat (can give you more details if you are interested).

Good luck with your project!

2 points:
1) Advantage of 170mm (and longer) is that there is a greater choice out there (and so you may find it easier to keep costs down if that's important). If you are thinking that you might go fixed gear in the future, you may want to consider shorter cranks - there is a good thread somewhere on LFGSS with lots of BB height / crank length combos that people find to work OK on fixies.

2) Have you got another bike that you ride regularly at the moment? If so, you may want to stick with the same length cranks as what you've got already as you will be used to the feel of that.