you really don't want to fool with an inch gun. I'll help you out and take the kit and mags off your hands for $250.
Truthfully though, I think the L1A1 is about as close to perfect stock as you can get. Assuming the bore is fine and the numbers match, you really do have a valuable kit. Even though you got it for free - the magazines are worth more than $100 - I wouldn't even think of hacking up since it's unlikely you'll be able to duplicate it in the future. L1A1 is my absolute favorite rifle.
Build it like it is and get yourself a metric Imbel kit to turn into a GSR or a Para. It's what I'm doing - an Imbel based FrankenFAL Para GSR with a scope and some L1A1 bits on it that I'll have Gunplumber build next year.
Barring that, sell it (to me! to me!) on the FAL Files to someone who would love to have it and take the money and build yourself exactly what you want from something that is far more common than an inch rifle.
Repetition is not truth.
"Hope is not a method and wishes are not plans."
Gen. Carl Vuono, USA
KRG, SUT, PSP