I've been completely inspired by this thread - I'm amazed by the transformation from knocked up parts to near-nos-ness
I'm currently on a never-ending dream bike build but once that is complete, I will be turning my hand to restoration. Marvellous man, just marvellous!
Thanks for the kind comments dude......I get a lot of enjoyment out of restoration.....taking something which is neglected/worn out/scruffy and turning it back into something usable again.
I'm currently helping a friend (who's recently got into cycling) strip down a Zolatone Pine Mountain just like this. Initially he was quite disheartened when he collected it (as it was really unloved/scruffy) but now we've stripped it down and started cleaning everything I think he's feeling better about his purchase. It's amazing what a bit of time and elbow grease can achieve.
With regards to the polishing - essentially I just use progressively finer grades of wet and dry paper and GT85 as a lubricant (even a needle file in the case of the dérailleur to take out the really deep scuffs).
I only use the roughest paper I can get away with to remove the scratches in the surface - i.e. don't just start with really rough paper as you'll spend ages trying to get out the deeper scratches that you create with the rough paper.
For reference - the dérailleur was cleaned up using a needle file, 320grit paper, 200grit, 800grit, 1400grit, 2000grit, then autosol polish.
I also rotate the direction that I move the paper across the surface with each change of paper type (so if initial cleanup is with 320g is an up/down movement, then the next 200g paper is a left/right movement etc, etc - so that you always "cross" the scratches that you created with the previous paper)
Hope some of that waffle helps...!