Getting the rights holders to say OK.A perhaps even better idea, but would take some more initial work, is literally retyping and relayout of the works. The beauty of this is that you end up with an editable "source" for the books that can be used to generate PDFs, or HTML, or whatever. It's also easy for ANYONE to contribute, because they would mostly just have to type text from the books, and that means that a lot more people can participate.
The hard part is ...
If you did that, you would have lots of volunteers and all of MT could be done in about a year. One book a month. Your process is a great idea. Count me in, for any part of it. Type, scan, layout, convert, and publish PDF. The first step, getting permission, should only take you about a lifetime though.
-Swiftbrook